CO - Arapahoe: Arapahoe County Board of County Commissioners

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Arapahoe County Board of County Commissioners

Kathleen Conti, District 1 Nancy Sharpe, District 2

Jeff Baker, Chair, District 3 Nancy Jackson, Chair Pro Tem, District 4

Bill Holen, District 5

Study Session August 20, 2019 Study Session Topics

Department Director Update (BoCC Conference Room) Bryan Weimer, Director, Public Works and Development Board of County Commissioners

No additional detail provided

Tagged Passions:development, Development, Public Works, and public works

*2018 CAFR Presentation (WHR) Discussion of the 2018 Comprehensive Annual Financial Report and Audit Report

Request: Information/Direction Erik Burge, Interim Accounting Manager/Senior Accountant, Finance Todd Weaver, Budget Manager, Finance Janet Kennedy, Director, Finance John Christofferson, Deputy County Attorney

Tagged Passions:finance, legal, budget, manager, audit, and financial report

2018 CAFR PRESENTATION BSR - STUDY SESSION.PDF 2018 ARAPAHOE COUNTY CAFR WEB.PDF

Break

*Long Range Planning Committee Follow-Up Discussion (WHR) Discussion of a request for direction from the Board of County Commissioners following the initial recommendations of the Long Range Planning Committee, including whether to prepare a resolution for Board action

Request: Information/Direction Michelle Halstead, Director, Communication and Administrative Services Janet Kenendy, Director, Finance Shannon Carter, Director, Open Spaces Ron Carl, County Attorney DOC_BSR_STUDY_SESSION_LRPC_2_190815.DOC
Tagged Passions:planning, finance, legal, services, communications, and Communications

Department Director Update (BoCC Conference Room) Janet Kennedy, Director, Finance Board of County Commissioners

* To Be Recorded As Required By Law WHR - West Hearing Room Arapahoe County is committed to making its public meetings accessible to persons with disabilities. Assisted listening devices are available. Ask any staff member and we will provide one for you.

Tagged Passions:finance

If you need special accommodations, contact the Commissioners Office at 303-795-4630 or Relay Colorado 711.

Please contact our office at least 3 days in advance to make arrangements.

Administration Building West Hearing Room

5334 S. Prince St. Littleton, CO 80120

303-795-4630 Relay Colorado 711 The Arapahoe County Board of County Commissioners typically holds weekly Study Sessions on Monday and Tuesday. Study Sessions (except for Executive Sessions) are open to the public and items for discussion are included on this agenda. Agendas (except for Executive Sessions agendas) are available through the Commissioners Office or through the County s web site at www.arapahoegov.com. Please note that the Board may discuss any topic relevant to County business, whether or not the topic has been specifically noticed on this agenda. In particular, the Board typically schedules time each Monday under Committee Updates to discuss a wide

Tagged Passions:business

range of topics. In addition, the Board may alter the times of the meetings throughout the day, or cancel or reschedule noticed meetings. Questions about this agenda? Contact the

Commissioners Office at 303-795-4630 or by e-mail at commissioners@arapahoegov.com 10:00 A.M. 11:00 A.M. Documents: 1:00 P.M. Documents: 2:30 P.M.

Kathleen Conti, District 1 Nancy Sharpe, District 2

Jeff Baker, Chair, District 3 Nancy Jackson, Chair Pro Tem, District 4

Bill Holen, District 5

Study Session August 20, 2019 Study Session Topics

Department Director Update (BoCC Conference Room) Bryan Weimer, Director, Public Works and Development Board of County Commissioners

No additional detail provided

Tagged Passions:development, Development, Public Works, and public works

*2018 CAFR Presentation (WHR) Discussion of the 2018 Comprehensive Annual Financial Report and Audit Report

Request: Information/Direction Erik Burge, Interim Accounting Manager/Senior Accountant, Finance Todd Weaver, Budget Manager, Finance Janet Kennedy, Director, Finance John Christofferson, Deputy County Attorney

Tagged Passions:finance, legal, budget, manager, audit, and financial report

2018 CAFR PRESENTATION BSR - STUDY SESSION.PDF 2018 ARAPAHOE COUNTY CAFR WEB.PDF

Break

*Long Range Planning Committee Follow-Up Discussion (WHR) Discussion of a request for direction from the Board of County Commissioners following the initial recommendations of the Long Range Planning Committee, including whether to prepare a resolution for Board action

Request: Information/Direction Michelle Halstead, Director, Communication and Administrative Services Janet Kenendy, Director, Finance Shannon Carter, Director, Open Spaces Ron Carl, County Attorney DOC_BSR_STUDY_SESSION_LRPC_2_190815.DOC
Tagged Passions:planning, finance, legal, services, communications, and Communications

Department Director Update (BoCC Conference Room) Janet Kennedy, Director, Finance Board of County Commissioners

* To Be Recorded As Required By Law WHR - West Hearing Room Arapahoe County is committed to making its public meetings accessible to persons with disabilities. Assisted listening devices are available. Ask any staff member and we will provide one for you.

Tagged Passions:finance

If you need special accommodations, contact the Commissioners Office at 303-795-4630 or Relay Colorado 711.

Please contact our office at least 3 days in advance to make arrangements.

Administration Building West Hearing Room

5334 S. Prince St. Littleton, CO 80120

303-795-4630 Relay Colorado 711 The Arapahoe County Board of County Commissioners typically holds weekly Study Sessions on Monday and Tuesday. Study Sessions (except for Executive Sessions) are open to the public and items for discussion are included on this agenda. Agendas (except for Executive Sessions agendas) are available through the Commissioners Office or through the County s web site at www.arapahoegov.com. Please note that the Board may discuss any topic relevant to County business, whether or not the topic has been specifically noticed on this agenda. In particular, the Board typically schedules time each Monday under Committee Updates to discuss a wide

Tagged Passions:business

range of topics. In addition, the Board may alter the times of the meetings throughout the day, or cancel or reschedule noticed meetings. Questions about this agenda? Contact the

Commissioners Office at 303-795-4630 or by e-mail at commissioners@arapahoegov.com 10:00 A.M. 11:00 A.M. Documents: 1:00 P.M. Documents: 2:30 P.M. BoCC Study Session August 20, 2019 Page 1 of 1 Board Summary Report

Date: July 17, 2019

No additional detail provided

To: Board of County Commissioners

No additional detail provided

Through: Janet Kennedy, Finance Director

Tagged Passions:finance

From: Erik Burge, Interim Finance Accounting Manager

Subject: Presentation of the 2018 Comprehensive Annual Financial Report and Audit Report
Tagged Passions:finance, manager, audit, and financial report

Direction/Information: This study session is informational only. Staff will provide a copy of the December 31, 2018 Comprehensive Annual Financial Report (CAFR) which includes the Auditor s Report and the Single Audit Report, also known as the 2018 CAFR. The auditors will be presenting their report and be available for any questions.

Request and Recommendation This study session is informational only regarding the CAFR for the Year Ended December 31, 2018. Background Copies of the 2018 Comprehensive Annual Financial Report will be delivered to the Board of County Commissioners (BoCC) prior to the study session for their review. Links to Align Arapahoe The 2018 CAFR is in alignment with Fiscal Responsibility as it presents to the BoCC, the Elected Officials and Department Directors, citizens and other constituents of the County the County s fiscal health and stewardship of tax payer money for fiscal year 2018. Discussion The County s independent external auditors, CliftonLarsonAllen, LLP (CLA) have concluded their audit of the fiscal year 2018 CAFR. They have provided their auditor s report along with their single audit reports and issued an Unqualified Opinion (clean opinion) over the 2018 CAFR. CLA did issue two findings in conjunction with their work over the 2018 CAFR and Schedule of Expenditure of Federal Awards and issued a management letter which will be reviewed by the Audit Committee and their findings presented to the BoCC at a later date.

Tagged Passions:health, finance, taxes, Taxes, audit, and financial report

Fiscal Impact There is no fiscal impact this is for informational and discussion purposes only.

Reviewed by Finance Department County Attorney s Office
Tagged Passions:finance and legal

2018 Comprehensive Annual Financial Report

Year Ended December 31, 2018 Arapahoe County Colorado DEPARTMENT OF FINANCE
Tagged Passions:finance and financial report

5334 South Prince Street Littleton, Colorado 80120-1136

www.arapahoegov.com Reasonable Accommodation Policy In accordance with the Americans with Disabilities Act, this material is available in alternative formats upon request. Please contact the Finance Department at 5334 S. Prince Street, Littleton, Colorado, 80120-1136, by telephone at (303) 795-4620, by email at Finance@arapahoegov.com or by Relay Colorado at 711 for assistance. 2018 ACKNOWLEDGEMENTS

Tagged Passions:finance, streets, and policy

BOARD OF COUNTY COMMISSIONERS Kathleen Conti ...................................District 1 Nancy Sharpe ....................................District 2 Jeff Baker ............................... District 3, Chair Nancy Jackson ...........District 4, Chair Pro Tem Bill L. Holen .......................................District 5

ELECTED OFFICIALS PK Kaiser ............................................ Assessor Joan Lopez ........................Clerk and Recorder Dr. Kelly Lear ...................................... Coroner George Brauchler ..................District Attorney Tyler S. Brown ........................................Sheriff Sue Sandstrom..................................Treasurer FINANCE DEPARTMENT Janet Kennedy, CPA ...............Finance Director Erik Burge, CPA .. Interim Accounting Manager Nandu Giri, CPA ........................Accountant III Loren Kohler ..............................Accountant III Tanya Lepler, CPA ......................Accountant III Jennifer Bennett .........................Accountant II Jon Rajewich .......SAP Business Ops. Manager Andrew Barranco ........SAP Functional Analyst Mary Lisa Bugel ..........SAP Functional Analyst Joe Cornejo ..................SAP Functional Analyst Debbie McCarty ..........SAP Functional Analyst Stephen Krusoe .................... Technical Writer Jennifer Leake ...............................SAP Trainer
Tagged Passions:business, finance, legal, public safety, Treasurer, manager, TREASURER, and coroner

Comprehensive Annual Financial Report Year Ended December 31, 2018

ARAPAHOE COUNTY, COLORADO COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2018 i
Tagged Passions:finance and financial report

TABLE OF CONTENTS

INTRODUCTORY SECTION Page Letter of Transmittal ......................................................................................................................................................A-1 GFOA Certificate of Achievement ................................................................................................................................A-6 List of Principal Officers ................................................................................................................................................A-7 Organizational Chart .....................................................................................................................................................A-8

FINANCIAL SECTION Independent Auditors Report .......................................................................................................................................B-1 Management s Discussion and Analysis ......................................................................................................................B-4

Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ................................................................................................................................. C-1 Statement of Activities .......................................................................................................................... C-2 Governmental Fund Financial Statements: Balance Sheet Governmental Funds ............................................................................................................ C-4 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .............................................................................................................................. C-6 Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds .................. C-8 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities............................................................ C-10 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual: General Fund ....................................................................................................................................... C-12 Social Services .................................................................................................................................... C-13 Open Spaces Sales Tax ..................................................................................................................... C-14 Proprietary Fund Financial Statements:
Tagged Passions:funding, finance, budget, sale, social services, taxes, Taxes, services, audit, and financial report

Statement of Net Position Proprietary Funds ................................................................................................ C-15 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds ................................. C-16 Statement of Cash Flows Proprietary Funds ................................................................................................ C-17

Tagged Passions:funding

Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position Fiduciary Funds ................................................................................... C-18 Statement of Changes in Fiduciary Net Position Fiduciary Funds ............................................................... C-19 Notes to the Financial Statements ............................................................................................................................ C-21

Required Supplementary Information: Arapahoe County Retirement Plan - Schedule of Changes in the Net Pension Liability and Related Ratios ............................................................................................................................... C-63 Arapahoe County Retirement Plan - Schedule of Pension Contributions ............................................................... C-64 Supplementary Information: Combining and Individual Fund Financial Statements and Schedules: Combing Balance Sheet Nonmajor Governmental Funds .............................................................................. D-1 Combining Statement of Revenues, Expenditures and Changes in Fund Balance Nonmajor Governmental Funds .......................................................................................................... D-2

Tagged Passions:funding, finance, retirement, seniors, and financial report

Description of Nonmajor Governmental Funds Special Revenue ................................................................ D-4 Combining Balance Sheet Nonmajor Special Revenue Funds .................................................................... D-6 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Special Revenue Funds ..................................................................................................... D-10

Tagged Passions:funding

Description of Nonmajor Governmental Funds Capital Project Funds ........................................................ D-14 Combining Balance Sheet Nonmajor Capital Projects Funds ...................................................................... D-16 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Capital Projects Funds ....................................................................................................... D-18

Tagged Passions:funding, capital spending, and Capital Spending

Description of Nonmajor Governmental Funds Debt Service Funds ........................................................... D-20 Combining Balance Sheet Nonmajor Debt Service Funds .......................................................................... D-22 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Debt Service Funds ............................................................................................................ D-23 Schedules of Revenues, Expenditures and Changes in Fund Balance Budget and Actual: Electronic Filing Technology ............................................................................................................... D-24 Cash-In-Lieu ........................................................................................................................................ D-25 Law Enforcement Authority District ..................................................................................................... D-26 Arapahoe/Douglas Works .................................................................................................................. D-27

ARAPAHOE COUNTY, COLORADO COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2018
Tagged Passions:funding, finance, budget, public safety, Technology, technology, and financial report

TABLE OF CONTENTS (Continued)

ii

Road Bridge Fund ............................................................................................................................ D-28 Conservation Trust .............................................................................................................................. D-29 Contingent ............................................................................................................................................ D-30 Communications Network Replacement ............................................................................................ D-31 Sheriff s Commissary .......................................................................................................................... D-32 Community Development .................................................................................................................... D-33 Forfeited Property ................................................................................................................................ D-34 Developmental Disabilities .................................................................................................................. D-35 Grants .................................................................................................................................................. D-36 Homeland Security Grant .................................................................................................................... D-37 Fair ....................................................................................................................................................... D-38 Capital Expenditure Fund .................................................................................................................... D-39 Infrastructure ........................................................................................................................................ D-40 Arapahoe County Recreation District ................................................................................................. D-41 Arapahoe County Water and Wastewater PID .................................................................................. D-42 Lease Purchase Fund ......................................................................................................................... D-43 Arapahoe County Building Finance Corporation ................................................................................ D-44 Description of Proprietary Funds - Internal Service Funds .............................................................................. D-45 Combining Statement of Net Position Proprietary Funds ............................................................................. D-46 Combining Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds .............. D-48 Combining Statement of Cash Flows Proprietary Funds ............................................................................. D-50 Schedule of Budgetary Compliance Proprietary Funds ................................................................................ D-52 Description of Fiduciary Funds Agency Funds ............................................................................................. D-53 Combining Statement of Changes in Asset and Liabilities Fiduciary Funds ................................................ D-54

Tagged Passions:funding, grant, finance, sewer, leasing, streets, budget, utility, security, development, Utility, public safety, water, Conservation, purchasing, Development, communications, property, compliance, Communications, recreation, and community development

Statements of Component Unit without Separately Presented Financial Statements - E-911 Authority: Governmental Funds Balance Sheet/Statement of Net Position Component Unit

E-911 Authority .................................................................................................................................... D-55 Statement of Governmental Fund Revenues, Expenditures and Changes in Fund Balance Component Unit - E-911 Authority ...................................................................................................... D-56 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Component Unit - E-911 Authority ................................................................... D-57
Tagged Passions:funding, finance, 911, budget, and financial report

Other Supplementary Information: Human Services Schedule of EBT Authorizations ........................................................................................... D-59

Local Highway Finance Report ......................................................................................................................... D-60 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Building Maintenance Administration .................................................................................................. D-62 Board Designated ................................................................................................................................ D-63 STATISTICAL SECTION Financial Trends: Table 1 Net Position by Component .............................................................................................................E-2 Table 2 Changes in Net Position ..................................................................................................................E-3 Table 3 Fund Balances - Governmental Funds ............................................................................................E-4 Table 4 Changes in Fund Balances, Governmental Funds .........................................................................E-6 Revenue Capacity: Table 5 Assessed Value and Actual Value of Taxable Property ..................................................................E-8 Table 6 Direct and Overlapping Property Tax Rates....................................................................................E-9 Table 7 Principal Property Taxpayers...........................................................................................................E-10 Table 8 Property Tax Levies and Collections ...............................................................................................E-11 Debt Capacity: Table 9 Ratios of Outstanding Debt by Type................................................................................................E-12 Table 10 Computation of Direct and Overlapping Debt .................................................................................E-14 Table 11 Legal Debt Margin Information ........................................................................................................E-16 ARAPAHOE COUNTY, COLORADO COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2018
Tagged Passions:funding, finance, legal, budget, taxes, Taxes, services, property, financial report, rates, and property tax

TABLE OF CONTENTS (Continued)

iii Demographic and Economic Information: Table 12 Demographic and Economic Statistics ............................................................................................E-17 Table 13 Principal Employers .........................................................................................................................E-18 Operating Information: Table 14 Full-time Equivalent County Employees by Function/Program .......................................................E-19 Table 15 Operating Indicators by Function/Program ......................................................................................E-20 Table 16 Capital Assets Statistics by Function/Program ...............................................................................E-21
Tagged Passions:program

COMPLIANCE SECTION Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards..................................................................F-1 Independent Auditor s Report on Compliance for Each Major Federal Program, Report on Internal Controls Over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ......................................................F-3 Schedule of Expenditures of Federal Awards .......................................................................................................F-5 Notes to Schedule of Expenditures of Federal Funds ...........................................................................................F-7 Schedule of Findings and Questioned Costs ........................................................................................................F-8 Corrective Action Plan ............................................................................................................................................F-11 Summary Schedule of Prior Year Findings ...........................................................................................................F-12

No additional detail provided

Tagged Passions:funding, finance, program, compliance, audit, and financial report

Department of Finance

Tagged Passions:finance

5334 South Prince Street Littleton, Colorado 80120-1136 Phone: 303-795-4620 Fax: 303-738-7929 www.arapahoegov.com finance@arapahoegov.com

No additional detail provided

Tagged Passions:finance and streets

MISSION Enhancing your quality of life through exceptional delivery of services and efficient use of public funds.

To the Board of County Commissioners and to the Citizens of Arapahoe County, Colorado:
Tagged Passions:funding and services

Colorado state law requires that every general purpose local government publish a complete set of audited financial statements. This report is published and hereby submitted to fulfill that requirement for the year ended December 31, 2018. This report includes information on the financial activities of Arapahoe County (hereafter referred to as the County). Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. To the best of our knowledge, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position of the County as a whole and its various funds. All required disclosures necessary to enable the reader to gain an understanding of the County s financial activities have been included. The County financial statements have been audited by CliftonLarsonAllen LLP, a firm of licensed Certified Public Accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the County present fairly, in all material respects, the financial position of the County. The independent auditors have issued an unmodified ( clean ) opinion on the County s financial statements for the year ended December 31, 2018. The independent auditors report is presented as the first component of the financial section of this report. Management s Discussion and Analysis (MD A) immediately follows the independent auditors report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD A complements this letter of transmittal and should be read in conjunction with it.

No additional detail provided

Tagged Passions:funding, finance, audit, license, and financial report

Profile of Arapahoe County

Arapahoe County, incorporated in 1902, is located in the north central part of the State. The County is located in the southeastern portion of the Denver metropolitan area and covers approximately 850 square miles. Arapahoe County, with the county seat located in the City of Littleton, is the third largest county in the State of Colorado with a population of about 650,000. A majority of residents live in the urbanized western part of the County, while other residents live in the rural, rolling farmlands to the east. The County contains all or part of the following cities and towns: Aurora, Bennett, Bow-Mar, Centennial, Cherry Hills Village, Columbine Valley, Deer Trail, Englewood, Foxfield, Glendale, Greenwood Village, Littleton and Sheridan. There are also nine school districts and approximately 420 local improvement and service districts within the County. A-1 Comprehensive Annual Finance Report (CAFR) Transmittal A-2 A five-member Board of County Commissioners (BOCC) serves as the legislative, policy-making and administrative body governing the unincorporated area of the County. The Commissioners serve four year terms and are considered full time employees. The County does not have a County Manager or Administrator. The Commissioners are elected from individual districts within the County. The Board currently includes: Kathleen Conti ................................................................................................ District 1 Nancy N. Sharpe, Finance Officer ................................................................. District 2 Jeff Baker, Chair ............................................................................................. District 3 Nancy Jackson, Chair Pro Tem ..................................................................... District 4 Bill L. Holen ..................................................................................................... District 5 Departments overseen by the Board of County Commissioners include: BOCC Administration, Communication Services, Community Resources, County Attorney, Facilities and Fleet Management, Finance, Human Resources, Human Services, Information Technology, Public Works and Development, Department of Strategy and Performance, and Open Spaces. In addition to the BOCC there are six elected officials that serve the County in specific areas. These positions are independent of the BOCC in their duties. The BOCC does have budgetary oversight for these departments.
Tagged Passions:rural, finance, legal, strategic, budget, development, services, performance, Technology, trails, Development, communications, technology, Public Works, public works, administrator, manager, education, policy, human resources, Communications, information technology, and Information Technology

PK Kaiser ........................................................................................................Assessor Sue Sandstrom .............................................................................................. Treasurer Dr. Kelly Lear ................................................................................................... Coroner Joan Lopez .................................................................................... Clerk and Recorder George Brauchler ................................................................................ District Attorney Tyler S. Brown .................................................................................................... Sheriff

The Public Trustee is appointed by the Governor and is responsible for processing transactions related to real property located within the County including the release of deeds and the processing of foreclosures. This office is a fiscally separate and independent agency. Budget Process The budget helps to ensure that the County's financial strength and integrity continue to be maintained and enhanced. The budget also supports continuous customer service efforts to foster efficiency, cost effectiveness, and excellence in the provision of services to the Citizens of Arapahoe County. The County constructs its budget on a calendar year as required by Part 1 of Article 1 of Title 29 of the Colorado Revised Statutes, which governs the budget process of Colorado counties. On or before August 15th, elected officials and department directors submit revenue estimates and expenditure requests to the Budget Division of the Finance Department. On or before August 25 of each year, the County Assessor submits the current total assessed valuations for all taxing entities in the County and the factors needed to compute the statutory property tax revenue limits. Based on this information and following a review process, the Budget Division submits a recommended structurally balanced budget to the Board of County Commissioners through the Executive Budget Committee on or before October 15. The Executive Budget Committee is composed of selected representatives from the elected officials and department directors who review preliminary budget issues and requests and present their recommendations to the Board of County Commissioners. The County currently prepares budgets on an annual basis. Comprehensive Annual Finance Report (CAFR) Transmittal A-3 All mill levies must be certified by the BOCC on or before December 22nd of each year. Prior to the beginning of the next fiscal year, the BOCC enacts a budget adoption resolution and an appropriating resolution to approve the total budget and departmental expenditures. The BOCC may make no contract and no liability against the County can be created by any County officials unless an appropriation has been made. In addition, neither the BOCC nor any County official can expend money for any of the purposes set out in the appropriation resolution in excess of the amount appropriated. In the case of an emergency or a contingency that was not reasonably foreseeable, the BOCC may authorize the expenditure of funds in excess of the budget by a resolution adopted by a majority vote. Local Economy Arapahoe County is located in the southeast portion of a major metropolitan area. Its economy is greatly influenced by the economy of the state and the entire Denver metro area. The local economy does generally follow national economic trends. The County has a diversified economic base with numerous city and other local governments, a large general aviation airport, a large military base, many schools, shopping centers, health care facilities and high tech businesses contributing to the activity. Growth in residential and commercial construction, the real estate market, employment, consumer spending, and inflation all play a role in the local economy.
Tagged Passions:funding, health, construction, business, finance, legal, market, airport, budget, appointments, taxes, Taxes, contract, public safety, Public Transit, services, emergency, employment, property, Treasurer, commercial, education, TREASURER, military, government efficiency, economy, property tax, coroner, and growth

Growth in the Colorado economy continues but due to the continued lower energy prices and slower growth in home prices, this growth rate is now on par with national trends rather than exceeding them. Over the past few years, Colorado s strong labor market and desirable quality of life has driven population growth, increases in wages and consumer spending and is reflected in a very active real estate market with increasing home prices and construction. Colorado s labor market continues to add jobs, albeit at a slower rate, with the largest gains in the professional and business services, scientific and technical services, and the leisure and hospitality sectors. For many employers, the tight labor market is making finding skilled labor difficult. Colorado s continued economic growth will depend upon factors such as growth in wages, housing affordability, and the impact of international trade and energy prices businesses and consumers..

Colorado s unemployment rate in 2019 is estimated to be 3.6 and will continue to be lower than the national rate. The economic recovery has resulted in increasing home prices that outpaces most of the nation and the level of residential construction is struggling to keep up. While home prices have begun to moderate, many other economic indicators for Colorado mirror that of the national economy with regard to income and wage growth as well as consumer spending. While the overall growth during the past few years has generated additional revenue, the growth in Colorado and Arapahoe County also results in additional expenses for local governments. Long-term Financial Planning The County currently projects revenues, expenditures and available fund balances for 5-year periods to help determine its financial position and plan for the future. It is the County s intent each year to structurally balance the General Fund operating budget, meaning that budgeted ongoing expenditures do not exceed budgeted ongoing revenues. The available fund balance at the end of one year (in excess of policy reserves) can then be used to budget for capital projects and other one-time uses in the following year. The Executive Budget Committee (EBC), after a thorough review of the County s financial position, has set the following priorities when planning for the future. Maintaining a structurally balanced General Fund operating budget Maintaining the Total Compensation philosophy in order to recognize and retain a quality workforce Continuing the capital improvement program with available resources Attempting to meet growing needs despite limited revenue growth Looking ahead to address long-term budgetary issues Comprehensive Annual Finance Report (CAFR) Transmittal A-4
Tagged Passions:compensation, planning, recognition, construction, business, finance, market, budget, capital spending, Capital Spending, services, program, policy, trade, energy, workforce, economy, growth, jobs, and housing

In planning for 2019, the General Fund budget is structurally balanced with a 2.1 million operating surplus but also includes a reduction in fund balance of 6.5 million. This represents a planned use of fund balance for one-time uses such equipment and vehicles for new law enforcement positions as well as a transfer 6.1 million to the Capital Expenditure Fund for capital projects. This accomplishment was the result of measures implemented by the Executive Budget Committee and the Board of County Commissioners with the cooperation of all County departments and elected offices. The 2019 adopted budget funded a 3.3 performance-based salary increase pool for employees, a slight decrease from 3.5 in 2018. This year s merit increase was also accompanied by a market increase to keep County salaries and salary structure on par with comparative data with similar local organizations while still adhering to the County s commitment to a structurally balanced budget.

No additional detail provided

Tagged Passions:planning, equipment, market, budget, capital spending, public safety, Capital Spending, surplus, and performance

For 2019, the Executive Budget Committee reviewed trends in revenues and expenditures, considered the addition of the total compensation recommendations, and determined that with the current revenue projection for 2019 there could be additions to the operating budget but such additions would need to be limited in order to structurally balance the budget in future budget years as well. The Executive Budget Committee started with a baseline budget and after careful analysis recommended only those budget packages that the Committee felt were significant enough to be included in the upcoming budget.

Tagged Passions:compensation and budget

For 2019, the County has budgeted 12.8 million in capital improvements which includes replacement of the Detention Center door control and intercom system ( 3.1 million), contributing toward Phase 2 of the Detention Center Infrastructure Improvements ( 1.7 million), Iliff Avenue Improvements ( 1.7 million), the 6th Avenue Crossing project ( 1.5 million), Peoria Salt Dome Replacement ( 1.2 million), Gun Club Avenue project ( 500,000), and other facility projects ( 1.0 million), other road/streets/drainage projects ( 1.3 million), Sheriff/Public Safety Projects ( 505,000), and Technology/Communication Projects ( 255,000).

Tagged Passions:gun control, facility, streets, budget, capital spending, public safety, Capital Spending, Technology, communications, technology, Communications, Gun Control, detention, and stormwater

Preparing for the Future

Property tax is the largest source of revenue to the County, comprising 45 of overall County revenues. Per State regulations, property assessments are conducted only every other year with the impact on property tax collections occurring only in even-numbered years. In intervening years such as 2018, growth in property tax collections is limited to new construction and other additions and subtractions and does not take into account changes in property values. Additionally, the County continues to be restricted by most provisions of the Taxpayers Bill Of Rights (TABOR), an amendment to Article X of the Colorado Constitution that limits the County s property tax revenue growth rate to the sum of the estimated inflation for the Denver metro area for that budget year plus the growth of new construction in the prior calendar year. The major impact of TABOR is that the County may not be able to retain all the property tax revenue it could collect. Due to this growth restriction, the County s property tax revenue growth from 2018 to 2019 is limited to 4.84 percent, which is the sum of the estimated inflation of 3.30 percent and new construction growth ( local growth ) of 1.54 percent in the 2018 assessment. A resulting temporary tax credit of 2.604 mills will be provided to taxpayers to adjust for the portion of the 15.821 base mill levy that cannot be collected under the provisions of TABOR. The County is permitted to extend a levy to recover property taxes refunded and abated in prior years to adjust for errors in property assessments and in 2019, this levy is 0.093 mills for about 869,000, and is included in the County s total levy. The 2019 adopted budget factors in the increase in assessed value and the current projections for inflation and as a result, the County s property tax revenue is projected to increase from 124.4 million in 2018 to 130.6 million. The total levy for the County will be set at 13.301 mills, up from 12.817 mills as the temporary tax credit decreases from 3.072 mills to 2.604 mills to remain within the TABOR revenue limitations and below the maximum levy of 15.821 mills. The County continues to make more effective use of its revenues through its Align Arapahoe strategic and performance management program, business process improvement efforts, stricter budgeting practices, technological advances, cost-sharing partnerships and creative service delivery methods. But the success of all these measures has also meant less and less unspent funds are available at the end of each year, funds which have traditionally been used to fund subsequent years Capital Improvement Projects and other one-time operational needs. A-6 ARAPAHOE COUNTY, COLORADO
Tagged Passions:funding, regulation, construction, business, strategic, budget, taxes, Taxes, capital spending, Capital Spending, Public Transit, program, performance, property, property tax, and growth

LIST OF PRINCIPAL OFFICERS

Board of County Commissioners (BOCC)

Kathleen Conti ........................................................................................... District 1 Nancy N. Sharpe ....................................................................................... District 2 Jeff Baker ........................................................................................ District 3, Chair Nancy Jackson ................................................................. District 4, Chair Pro Tem Bill L. Holen ............................................................................................... District 5

Elected Officials Other Than BOCC

PK Kaiser ................................................................................................. Assessor Joan Lopez ............................................................................... Clerk and Recorder Dr. Kelly Lear ............................................................................................. Coroner George Brauchler ........................................................................... District Attorney Tyler S. Brown ............................................................................................... Sheriff Sue Sandstrom ........................................................................................ Treasurer Department Directors Michelle Halstead ............................................................ Communication Services Don Klemme ....................................................................... Community Resources Ron Carl ........................................................................................ County Attorney Dick Hawes ......................................................... Facilities and Fleet Management Janet J. Kennedy ....................................................................................... Finance Patrick Hernandez ..................................................................... Human Resources Cheryl Ternes ................................................................................ Human Services David Bessen ..................................................................... Information Technology Shannon Carter ............................ Intergovernmental Relations and Open Spaces Bryan Weimer ........................................................... Public Works Development Manisha Singh .............................................................. Strategy and Performance A-7

Tagged Passions:finance, legal, strategic, development, public safety, services, performance, Technology, Development, communications, technology, Public Works, public works, Treasurer, TREASURER, human resources, Communications, information technology, intergovernmental, coroner, and Information Technology

CITIZENS OF ARAPAHOE COUNTY

CORONER Dr. Kelly Lear ASSESSOR PK Kaiser

CLERK RECORDER Joan Lopez

Tagged Passions:coroner

BOARD OF COUNTY

COMMISSIONERS Kathleen Conti

Nancy N. Sharpe Jeff Baker

Nancy Jackson Bill L. Holen DISTRICT ATTORNEY George Brauchler SHERIFF Tyler S. Brown

Tagged Passions:legal and public safety

TREASURER Sue Sandstrom

DEPARTMENTS Human Services Information Technology Community Resources
Tagged Passions:services, Technology, technology, Treasurer, TREASURER, information technology, and Information Technology

Intergovernmental Relations and Open

Spaces

Tagged Passions:intergovernmental

Public Works and Development

Facilities and Fleet Management Strategy and Performance Finance County Attorney Human Resources ARAPAHOE COUNTY GOVERNMENT ORGANIZATIONAL CHART Communication and Administrative Services B-1 INDEPENDENT AUDITORS' REPORT

Tagged Passions:finance, legal, strategic, development, services, performance, Development, communications, Public Works, public works, audit, human resources, and Communications

Board of County Commissioners Arapahoe County, Colorado

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of Arapahoe County, Colorado, as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the entity s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Arapahoe County Public Airport Authority or Arapahoe County Water and Wastewater Authority, both of which are discretely presented component units. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Arapahoe County Public Airport Authority and Arapahoe County Water and Wastewater Authority, is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the Arapahoe County Water and Wastewater, a discretely presented component unit, was not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Tagged Passions:finance, sewer, airport, utility, Utility, risk, procedure, water, audit, and financial report

Board of County Commissioners Arapahoe County, Colorado

B-2

Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Arapahoe County, Colorado as of December 31, 2018, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparisons for the General Fund, the Social Services Fund, and the Open Spaces Sales Tax Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis on pages B-4 - B-18 and required supplementary information on pages C-63 and C-64 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Arapahoe County, Colorado s basic financial statements. The Combining and Individual Financial Statements and Schedules, the Statements of Component Unit without Separately Presented Financial Statements, and Other Supplementary Information, as listed in the table of contents, (collectively, the Supplementary Information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), is also presented for purposes of additional analysis and is not a required part of the basic financial statements. The Supplementary Information and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information, combining and individual financial statements and schedules, the statements of component unit without separately presented financial statements and schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and statistical section listed in the table of contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

No additional detail provided

Tagged Passions:regulation, finance, budget, sale, social services, historical, taxes, Taxes, procedure, services, audit, and financial report

Board of County Commissioners Arapahoe County, Colorado

B-3

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 27, 2019, on our consideration of Arapahoe County, Colorado's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Arapahoe County, Colorado s internal control over financial reporting and compliance.

a CliftonLarsonAllen LLP Greenwood Village, Colorado June 27, 2019 MANAGEMENT S DISCUSSION AND ANALYSIS ARAPAHOE COUNTY, COLORADO B-4 In this Management s Discussion and Analysis (MD A) section of the Comprehensive Annual Financial Report (CAFR), we provide readers with a narrative overview and analysis of the financial activities of Arapahoe County, Colorado (the County) for the fiscal year ended December 31, 2018. When analyzing financial activities of the current fiscal year, it is useful to compare current fiscal year information with comparable information of the previous fiscal year. This discussion and analysis is also intended to serve as an introduction to the County's basic financial statements. We encourage readers to consider the information presented here in conjunction with the information presented in the letter of transmittal and basic financial statements to enhance their understanding of the County s financial activity and performance. FINANCIAL HIGHLIGHTS The County s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by 697,664,915 (net position). Of this amount, 727,501,989 relates to capital assets or is restricted in how it may be used. The unrestricted portion is ( 30,739,972). This balance is negative due to the reporting of the net pension liability. See Note 14 Retirement Plan on page C-51 for more information. Total net position increased by 2.6 million during fiscal year 2018. Total Net Pension Liability increased by 13.1 million during fiscal year 2018. At the end of the current fiscal year, the County s governmental funds reported combined fund

Tagged Passions:funding, grant, regulation, finance, retirement, contract, seniors, performance, compliance, audit, and financial report

balance of 170.6 million, an increase of 11.4 million from 2017.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS

The Basic Financial Statements are comprised of three components: government-wide financial statements, fund financial statements, and notes to the financial statements. In addition to the basic financial statements, this annual report also contains required supplementary information, other supplementary schedules and information, a statistical section, and a compliance section.
Tagged Passions:finance, compliance, and financial report

Government-wide Financial Statements

The government-wide financial statements provide readers with a long-term and broad overview of the County's finances as a whole in a manner similar to a private sector business. The government-wide financial statements use an economic resource measurement focus and the full accrual basis of accounting to present this overview in the Statement of Net Position and the Statement of Activities. Therefore, certain expenditures that are recorded in the governmental fund financial statements are either deferred or capitalized with amortization or depreciation in the government-wide financial statements. Long-term liabilities, deferred inflows of resources, revenues and related assets and deferred outflows of resources not reported in fund financial statements are recorded in the government-wide financial statements independent of the cash flows related to these items. Fiduciary fund assets held by the County for other parties either as trustee or as agent are not included in the government-wide financial statements because they cannot be used to finance the County s own operating programs. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-5 The Statement of Net Position presents the financial condition of the County as a whole at the end of the fiscal year by presenting information on all of the County's assets, deferred outflows of resources, liabilities, and deferred inflows of resources. The difference between these components is reported as net position. Over time, increases or decreases in net position serve as a useful indicator of whether the County's financial condition is improving or deteriorating. If the County s net position has increased, the financial condition of the County has improved. If the County s net position has decreased, the financial condition of the County has deteriorated. The Statement of Activities shows why the financial condition of the County as a whole has changed since the beginning of the fiscal year by presenting information showing how the government's net position has changed during the fiscal year. In the Statement of Activities, all changes in net position are reported as soon as the underlying economic event giving rise to the change occurs, regardless of the timing of related cash flows. The government-wide financial statements include not only the County, the general purpose government, but also legally separate and special purpose governmental entities, for which the County is financially accountable and with which the County has a significant relationship. These legally separate and special purpose governmental entities are known as component units. Component units are reported in the financial statements as either blended or discretely presented component units. The financial activity of blended component units can be objectively viewed as an extension of the general purpose government because their governing bodies are substantively the same and there is a financial benefit or burden relationship between the primary government and the component unit. Additional criteria for blending include whether or not the component unit provides services entirely or almost entirely to the primary government or otherwise exclusively or almost exclusively benefits the primary government even though it does not provide services directly to it. When the component unit s financial activities are blended into the County s financial statements, the activities are presented as if they were executed by the general local government. The balances of the blended component unit s financial statements are merged with the similar balances of the general purpose local government in a manner that prevents the balances of the blended component unit and the local primary government from being separately identified. The merged financial statements of the general purpose government and the blended component units are identified in the government-wide financial statements as the primary government. The following component units have been blended into the County s primary government in the government-wide financial statements:
Tagged Passions:business, finance, services, events, program, and financial report

Arapahoe County Building Finance Corporation Arapahoe County Law Enforcement Authority Arapahoe County Housing Authority Arapahoe County Recreation District Arapahoe County Water and Wastewater Public Improvement District Arapahoe County Retirement Trust Fund

The financial information for component units that should not be blended into the financial statements of the primary government are presented separately from the financial information presented for the primary government as discrete components units of the County in the government-wide financial statements. The following component units have been presented as discrete component units in the County s government- wide financial statements:
Tagged Passions:finance, sewer, retirement, utility, Utility, public safety, seniors, water, financial report, recreation, and housing

E-911 Authority Arapahoe County Airport Authority Arapahoe County Water and Wastewater Authority

Complete financial statements of the individual component units can be obtained from their respective administrative offices. Addresses and other additional information about the County s component units are presented in Note 1 Summary of Significant Accounting Policies on page C-21. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-6 On the Statement of Net Position, columns are used to separate the financial information of the primary government and the discretely presented component units. On the Statement of Activities, both columns and rows are used to separate the financial information of the primary government and the discretely presented component units. The government-wide financial statements can be found on pages C-1 to C-3 of this annual report. Fund Financial Statements A fund is a fiscal and accounting entity with a self-balancing set of accounts used to record financial resources with related liabilities and residual equities segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related regulations, requirements, restrictions or limitations.
Tagged Passions:regulation, finance, sewer, 911, airport, utility, Utility, water, compliance, and financial report

All of the funds of the County can be divided into three categories:

Governmental Funds Proprietary Funds Fiduciary Funds Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, because governmental fund financial statements measurement focus is on near-term inflows and outflows of current financial resources, as well as on balances of current financial resources available at the end of the fiscal year, these financial statements provide information about the ability of the fund to finance current activities and operate within the planned appropriations and budgets. Such information may be useful in evaluating a government's ability to meet its near-term financing and appropriation related requirements. All current financial resources contained in a governmental fund, other than the General Fund, are available only for carrying on the specific activities or attaining the certain objectives in accordance with special regulations, restrictions or limitations related to the purpose for which these funds were created. Therefore, all of the current financial resources contained in these governmental funds are considered to be assigned to the purpose for which the fund was created. The General Fund is used to account for all governmental fund activities that are not specifically accounted for in the other governmental funds. Therefore, the General Fund is one of the governmental funds that contain positive unassigned funds in addition to assigned funds in its fund balance. Current financial resources, the measurement focus of the governmental fund financial statements, are cash and near-cash assets reduced by short-term debt (spendable/appropriable resources) that are available during the fiscal year and 60 days after the end of the fiscal year. These funds financially support the purpose of carrying on specific activities or attaining certain objectives in the current fiscal year in accordance with the special regulations, restrictions or limitations that define the fund. Governmental fund accounting uses the modified accrual basis of accounting. This basis of accounting records and reports the inflows and outflows of current financial resources (spendable/appropriable resources) under the special regulations, restrictions or limitations that define the fund. By focusing on current financial resources, modified accrual accounting provides additional information related to the regulations, restrictions or limitations that define the fund and emphasizes the need for short-term financing and the generation of spendable resources. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-7 Because the focus of fund financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds in fund financial statements with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near- term financing decisions. A reconciliation of the total Governmental Fund Balances in the fund financial statements balance sheets to the Net Position of Governmental Activities in the government-wide financial statements is provided following the Balance Sheet of Government Funds in the fund financial statements. A reconciliation of the Net Change in Fund Balances - Total Governmental Funds in the fund financial statements to the Change in Net Position of governmental activities in the government-wide financial statements is provided following the Statement of Revenues, Expenditures and Changes in Fund Balances in the fund financial statements. These reconciliations provide explanations of differences between these balances and facilitate an understanding of the differences between the measurement focuses and basis of accounting used for preparing the fund financial statements and the government-wide financial statements. In this annual report, the County reports on twenty-four individual governmental funds. Information is presented separately in the fund financial statements for the General Fund, Social Services Fund, and Open Spaces Sales Tax Fund, all of which are considered major funds. Individual fund balance sheets for these major funds are presented in the Balance Sheet Governmental Funds and individual fund income statements in the Statement of Revenues, Expenditures and Changes in Fund Balance. The remaining twenty-one governmental funds are combined into a single, aggregated presentation as Other Governmental in the fund financial statements in the Basic Financial Statements section of this annual report. The basic governmental fund financial statements can be found on pages C-4 to C-14 of this annual report. Financial information related to the individual non-major funds is provided on pages D-1 to D-44 and D-62 to D-63 in the Combining and Individual Fund Financial Statements and Schedules Section of this annual report.
Tagged Passions:funding, regulation, finance, budget, sale, social services, taxes, Taxes, services, and financial report

Proprietary Funds The fund financial statements contain two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds may be used to report any activity for which a fee is charged to external users for goods or services. The County does not have any enterprise funds.

No additional detail provided

Tagged Passions:funding, finance, services, and financial report

Internal service funds are used to report any activity that provides goods and services to other funds of the primary government or component units on a cost reimbursement basis. The County uses five internal service funds to account for the following activities: the accumulation and allocation of equipment and materials costs, employee benefits, and self-insurance activities. The measurement focus for internal service funds is economic resources and the basis of accounting used is full accrual accounting. The revenue and expenses of the internal service funds have been eliminated in the government-wide Statement of Activities. The balance sheets of the internal service funds have been merged in the government-wide Statement of Net Position.

The five internal service funds are combined into a single, aggregated presentation as Governmental Activities Internal Service Funds in the fund financial statements in the Basic Financial Statements section. These statements can be found on pages C-15 to C-17 of this annual report. Financial information related to the individual internal service funds is provided on pages D-45 to D-52 in the Combining Financial Statements and Schedules section of this annual report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not included in the government-wide financial statements because the resources of these funds are not available to support the County's programs or operations. The County uses four fiduciary funds: one trust fund and three agency funds. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-8 The activity of the Arapahoe County Retirement Trust is presented in the Basic Financial Statements section of this annual report. The total of the three agency funds are combined into a single, aggregated presentation as Agency Funds Total in the fund financial statements in the Basic Financial Statements section of this annual report. The Agency Funds Total presentation does not include a statement presenting the activities that change the agency funds net position as part of the Basic Financial Statements. The basis of accounting for the agency funds is full accrual accounting. Financial information related to the individual agency funds is provided on pages D-53 and D-54 in the Combining Financial Statements and Schedules section of this annual report.
Tagged Passions:funding, equipment, finance, retirement, seniors, materials, services, program, insurance, and financial report

A
Statement of Fiduciary Net Position is presented in the fund financial statements for both the Arapahoe County Retirement Trust and the Agency Funds. A Statement of Changes in Fiduciary Net Position is presented for only the Arapahoe County Retirement Trust in the fund financial statements. The fiduciary fund financial statements can be found on pages C-18 and C-19 of this annual report.

No additional detail provided

Tagged Passions:funding, finance, retirement, seniors, and financial report

Notes to the Financial Statements

The notes to the Basic Financial Statements provide a more detailed explanation of some of the information contained in the financial statements that is essential to gain a better understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages C-21 through C-61 of this annual report. Budgetary Comparisons The County adopts an annual appropriation budget for all of its governmental funds. A budgetary comparison statement has been provided for the General Fund and all major special revenue funds on pages C-12 to C-14 of this annual report. Budget-to-actual comparisons for each of the remaining governmental funds are provided on pages D-24 to D-44 and D-62 to D-63 in the Combining Financial Statements and Schedules and Other Supplementary Information Sections of this annual report. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-9 GOVERNMENT-WIDE FINANCIAL ANALYSIS Comparative Summary of Net Position The following table provides a condensed comparative presentation of the County s government-wide Statement of Net Position for the primary government for 2018 and 2017: Governmental Activities 2018 2017 Assets Current and other assets 394,098,378 378,422,976 Capital assets 829,335,628 836,228,194 Total assets 1,223,434,006 1,214,651,170 Deferred outflows of resources 45,623,124 34,584,802 Liabilities Current and other liabilities 35,183,282 37,997,028 Long-term liabilities 361,746,968 359,795,304
Tagged Passions:funding, finance, budget, and financial report

Total liabilities 396,930,250 397,792,332

Deferred inflows of resources 174,461,965 156,359,848 Net position Net investment in capital assets 662,881,767 661,399,167 Restricted 65,523,120 67,832,163 Unrestricted (30,739,972) (34,147,538)

Tagged Passions:investment

Net position 697,664,915 695,083,792 Analysis of Government-wide Financial Position

No additional detail provided

Tagged Passions:finance

As of December 31, 2018, the County s primary government assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by 697.7 million. This is an increase of 2.6 million over the net position at December 31, 2017 of 695.1 million.

The County s net investment in capital assets, 662.9 million (95.0 of net position) in 2018 and 661.4 million (95.2 of net position) in 2017, is the largest portion of the County s primary government net position. Capital assets include land, land improvements, bridges, water and sewer lines, roads, buildings, building improvements, leasehold improvements, vehicles, furniture and equipment. These capital assets are used to provide services or utilities to citizens. Consequently, they are not available for future spending. Although the investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. An additional 65.5 million (9.4 of net position) in 2018 and 67.8 million (9.8 of net position) in 2017 represents restricted net position, resources that are subject to external restrictions on how they may be used. Included in this category are statutory reserves required by the State of Colorado, debt service reserves, and accumulated revenues that may only be used for specific voter-approved projects. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-10 The remainder of the County s primary government net position, ( 30.7 million) (4.4 of net position) in 2018 and ( 34.1 million) (4.9 of net position) in 2017 represents unrestricted net position that could otherwise be used to meet ongoing obligations to citizens and creditors when positive. The negative balance of unrestricted net position at the end of 2018 decreased by 3.4 million (10.0 ) from the balance at the end of 2017 due primarily to the increase in the net pension liability offset by the increase in current assets from property tax revenues. Deferred outflows of resources represent a consumption of net position that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future period. In 2018, the County has two items that qualify for reporting in this category. The first results from the loss on refunding on bonds reported in the government-wide Statement of Net Position. This amount, 0.9 million, resulted from the difference in the carrying value of refunded debt and the reacquisition price of the refunding debt. The second is pension outflows totaling 44.7 million, which is comprised of 10.4 million of contributions made subsequent to measurement date, 20.6 million in changes in assumptions, 4.4 million in differences between expected and actual experience, and 9.3 million in the difference between projected and actual earnings. Deferred inflows of resources represent an acquisition of net position that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. The County has two items that qualify for reporting in this category during 2018. The first is property tax revenue, 160.7 million, which is deferred in the year the taxes are levied, 2018, and measurable and recognized as an inflow of resources in the period they are collected, 2019. The second is pension inflows totaling 13.7 million, which is comprised of 1.5 million of differences between expected and actual experience and 12.2 million of differences between projected and actual earnings. Governmental activities saw an overall increase of 8.8 million in total assets. This includes an increase of 6.9 million in property tax receivable as property values increased and an increase of 8.8 million in current assets, due partially to increasing interest rates during 2018. These increases were offset by a decrease in net capital assets of 6.9 million mainly from depreciation.
Tagged Passions:recognition, equipment, sewer, streets, retirement, taxes, Taxes, utility, bond, Utility, services, water, property, investment, rates, and property tax

Liabilities had an overall decrease of 0.9 million compared to the prior year. This was due primarily to a decrease of 11.0 million in long-term debt from regularly scheduled debt service payments and an increase in the net pension liability of 13.1 million (see Note 14 Retirement Plan).

MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-11

Tagged Passions:retirement and seniors

Condensed Statement of Activities

The following table provides a condensed comparative presentation of the County s government-wide Statement of Activities for the primary government for 2018 and 2017:

2018 2017 Revenues Program revenues Charges for services 63,826,149 58,149,153 Operating grants and contributions 86,243,631 82,825,434 Capital grants and contributions 2,966,142 2,476,800 General revenues Property taxes 156,874,600 150,346,537 Sales tax 27,911,710 26,557,828 Other taxes 10,811,204 12,163,187 Investment income 4,704,611 2,794,250 Build America Bonds credit 1,084,245 1,080,190 Other revenues 5,854,285 8,341,272

Total revenues 360,276,577 344,734,651 Expenses General government 69,320,281 75,487,675 Public safety 99,859,375 92,591,674 Judicial services 15,143,028 14,879,697 Health welfare 106,223,692 98,713,590 Highways streets 28,882,804 27,985,852 Water wastewater 3,559,558 3,565,414 Airport - 591 Culture and recreation 27,661,147 24,625,180 Interest on long-term debt 7,045,569 7,508,707 Total expenses 357,695,454 345,358,380 Change in net position 2,581,123 (623,729) Net position - January 1 695,083,792 695,707,521 Net position - December 31 697,664,915 695,083,792 Governmental Activities
Tagged Passions:grant, health, sewer, 911, airport, streets, sale, taxes, Taxes, utility, bond, Utility, public safety, services, program, water, property, investment, property tax, and recreation

Analysis of Government-wide Results of Operations

Government-wide revenues for the County were greater than expenses by 2.6 million during fiscal year 2018 while government-wide expenses for fiscal year 2017 were greater than revenues by 0.6 million. Revenues in the government-wide Statement of Activities for 2018 increased 15.5 million (4.5 ) from revenues for 2017. In program revenues, charges for services increased 5.7 million mainly due to increases in building permits and the City of Centennial contract and in general revenues, property taxes increased 6.5 million as a continued result of higher assessed valuations. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-12 The changes from fiscal year 2018 to 2017 in the revenue and expense categories in the condensed comparative government-wide Statement of Activities: MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-13 The comparison of the component sources of revenue used in the condensed comparative government- wide Statement of Activities for 2018 and 2017: MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-14
Tagged Passions:taxes, Taxes, contract, services, program, property, and property tax

Expenses in the government-wide Statement of Activities for 2018 increased 12.3 million (3.6 ) from 2017. This is mainly the result of an increase in Public Safety and Health Welfare expenses from salaries and benefits from additional positions, annual raises and market adjustments.

FINANCIAL ANALYSIS OF THE GOVERNMENT S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds The focus of the County s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County s financing requirements. In particular, unassigned fund balance my serve as a useful measure of a governments net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the County s governmental funds reported combined ending fund balances of 170.6 million, an increase of 11.4 over the prior year s fund balance. Of the total balance, 44.2 million (25.9 ) represents unassigned fund balance. 27.2 million (16.0 ) is classified as assigned by the Board of County Commissioners for the purposes of the fund. 33.5 million (19.7 ) is classified as committed by Board Resolution. 65.5 million (38.4 ) is classified as restricted by an outside party for a specific purpose. The remaining fund balance, .1 million (.06 ) is classified as non-spendable (inventory and prepaid amounts). At the end of fiscal year 2018, the County had three major governmental funds: the General Fund, the Social Services Fund and the Open Spaces Sales Tax Fund. These major funds are reported separately in the County s basic financial statements. General Fund This fund is the primary operating fund of the County. At the end of the current fiscal year, unassigned fund balance of the general fund was 45.0 million while total fund balance was 61.5 million. As a measure of the General Fund s liquidity, it is useful to compare the total of the assigned and unassigned fund balance at the end of fiscal year 2018 to the budgeted total program revenues, transfers in, expenditures, and transfers out for the following fiscal year, 2019. The total of the assigned and unassigned fund balance of the General Fund at the end of fiscal year 2018 is 54.2 million, less the budgeted use of this fund balance in 2019, 6.5 million, is 47.7 million. This represents 25.1 of the adopted budget for General Fund total program revenues and transfers-in for 2019 of 189.6 million or 24.3 of the adopted budget for General Fund total program expenditures and transfers-out of 196.2 million. This indicates that an approximate 24.3 combination of budgeted revenue shortfalls and/or expenditures over budget could be sustained during 2019 before the liquidity of the General Fund is compromised. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-15 The County s budget is prepared according to Colorado statutes. The most significant budgeted fund is the General Fund. Notable differences between the original budget and the final amended budget are summarized as follows:
Tagged Passions:funding, health, finance, legal, market, budget, sale, social services, taxes, Taxes, public safety, services, program, compliance, and financial report

1.4 million increase in Public Safety for increased crime lab, professional service, and salaries and benefits expenditures.

No additional detail provided

Tagged Passions:public safety and crime

0.9 million increase in charges for services partially due to more funding from the City of Centennial for public safety service and higher property tax collection fees.

Tagged Passions:funding, taxes, Taxes, public safety, services, property, and property tax

0.9 million increase in miscellaneous revenue due to higher detention reimbursements. 0.5 million increase in Clerk Recorder s Office for professional service expenditures. 0.5 million increase in Public Works for salaries and benefits, credit card processing fees and

Tagged Passions:Public Works, public works, and detention

capital maintenance expenditures.

Actual General Fund revenues and other financing sources of 189.1 million was greater than the General Fund final appropriated revenues and other financing sources of 183.3 million by 5.8 million (3.2 ). This was primarily due to the increase in investment earnings and additional revenue from detention programs.

Actual General Fund expenditures and other financing uses of 185.7 million was less than the General Fund final appropriated expenditures and other financing uses of 193.0 million by 7.3 million (3.8 ). This difference was mainly from cost savings in Information Technology and Public Safety project expenditures. The total revenue and other financing sources in the General Fund increased by 9.6 million from 179.5 million in fiscal year 2017 to 189.1 million in fiscal year 2018 (5.4 ). This was mainly due to the increase in property taxes and an increase in the City of Centennial Public Safety contract. The total expenditures and other financing uses in the General Fund increased by 12.1 million from 173.7 million in fiscal year 2017 to 185.7 million in fiscal year 2018 (6.9 ). This increase was a result of higher salaries and benefits and transfers for capital expenditures.

Tagged Passions:taxes, Taxes, contract, public safety, program, Technology, technology, property, investment, information technology, detention, property tax, and Information Technology

Social Services Fund

This fund is mandated by the State of Colorado and is used to account for participation by the County in Federal and State public welfare programs. The fund balance remained consistent at 9.9 million at the end of fiscal year 2018 and fiscal year 2017. Nearly all of the fund balance is assigned. Revenues (excluding transfers) increased by 6.1 million (10.6 ) from 57.7 million in 2017 to 63.9 million in 2018. During 2018, the Social Services fund was funded 76.7 from State and Federal grant monies and 22.1 by property and other taxes. The largest portion of the revenue increase, 2.8 million, was for child welfare grants. Expenditures (excluding transfers) increased 7.8 million (10.6 ) from 54.9 million in 2017 to 62.5 million in 2018. The largest portion of the increase, 2.0 million, was from employee salaries and benefits. Open Spaces Sales Tax Fund This fund was established in 2003 to collect sales and use tax for the preservation and maintenance of open spaces within the County. The total fund balance increased 2.9 million from 40.0 million in 2017 to 42.9 million in 2018. The 42.9 million fund balance is fully restricted for Open Space projects and maintenance. Revenues increased by approximately 2.2 million (7.9 ) from 27.5 million in 2017 to 29.6 million in 2018. The fund received approximately 27.9 in sales tax and use revenue and 0.5 million in venue booth rental from the County Fairgrounds. MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-16 Expenditures (including transfers) increased 1.6 million (6.1 ) from 25.2 million in 2017 to 26.8 million in 2018. There were .9 million more share-back payments and grants awarded compared to 2017. In total, the fund expended 20.2 million in grants and share-back payments to incorporated municipalities and other governmental entities in 2018.
Tagged Passions:grant, sale, social services, taxes, Taxes, services, program, rental, preservation, and property

Non-major Governmental Funds

Tagged Passions:funding

The total fund balance of the combined non-major governmental funds increased by 4.9 million (9.6 ) from 51.4 million in 2017 to 56.4 million in 2018. Revenues (excluding transfers) increased 0.1 million from 80.3 million in 2017 to 80.4 million in 2014. This was mainly due to higher revenues in intergovernmental grants in the Community Resources fund. Expenditures (excluding transfers) increased 2.8 million from 87.3 million in 2017 to 90.1 million in 2018. This was mainly a result of increased spending in health and welfare from the Community Resources fund.

Proprietary Funds The net position for the County s internal service funds increased 1.6 million (4.4 ) from 36.0 million in 2017 to 37.6 million in 2018. Of the 37.6 million of the total net position of the proprietary funds in 2018, 34.6 million (92.1 ) was the net position of the Central Service Fund. The Central Service Fund is used primarily to allocate the cost of movable assets (furniture and equipment, computers, and vehicles) to the departments of the County to fund the replacement of the assets. It is also used to distribute the costs of central services (postage, fleet maintenance, parts and fuel charges) to departments of the County. Of the 34.6 million net position in the Central Services Fund at the end of 2018, approximately 11.3 million was invested in capital assets net of accumulated depreciation and approximately 23.4 million was available to replace expiring movable assets in the future. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The fiduciary funds are not included in the government-wide financial statements because the resources of these funds are not available to support the County's programs or operations. Therefore, they are not discussed in the Management s Discussion Analysis.
Tagged Passions:funding, grant, health, equipment, finance, services, program, computers, financial report, and intergovernmental

ANALYSIS OF CAPITAL ASSET AND LONG-TERM DEBT ACTIVITY Capital Assets Arapahoe County s investment in capital assets (net of accumulated depreciation) for its governmental activities was 829.3 million as of 2018 and 836.2 million as of 2017. This investment in capital assets includes land and land improvements, buildings, furniture and equipment, infrastructure, and construction in progress. The County s investment in capital assets (net of accumulated depreciation) decreased 6.9 million (0.8 ) during fiscal year 2018. A summary of the County s capital assets (net of depreciation) is as follows:

MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-17 Construction in progress (CIP) increased 2.0 million (55.5 ) from 3.7 million in 2017 to 5.7 million in 2018 as projects were started but not yet completed. The 5.7 million is composed of the following capital project categories: Additional information on Arapahoe County capital assets can be found in the Notes to the Financial Statements located on page C-27 and C-38 to C-40 of this annual report. Outstanding Long-Term Debt At the end of fiscal year 2018, the County had three bond issues, one long-term note payable, one certificate of participation and three capital lease purchase agreements outstanding. A summary of the County s long- term liabilities is as follows: 2018 2017 Land 45,221,497 44,482,737 Easements 4,322,860 4,322,860 Right of Ways 309,993,260 309,993,260 Water Rights 51,616,042 51,616,042 Construction in Progress 5,730,689 3,686,183 Capital Assets Not Being Depreciated: 416,884,348 414,101,082 Land Improvements 19,220,994 18,457,556 Buildings and Improvements 172,981,040 178,521,382 Furniture and Equipment 24,418,943 22,115,862 Infrastructure 195,830,303 203,032,312 Capital Assets Being Depreciated: 412,451,280 422,127,112 Total 829,335,628 836,228,194 Governmental Activities Arapahoe County Government's Capital Assets (Net of Accumulated Depreciation) Capital Project CIP Amount Software Development 1,731,612 Roads 295,042 Parks Trails 562,531 Building Improvement 3,141,504 5,730,689 MANAGEMENT S DISCUSSION AND ANALYSIS (Continued) ARAPAHOE COUNTY, COLORADO December 31, 2018 ____________________________________________________________________________________ B-18 The County s total long-term debt decreased 8.9 million in 2018 due to normal debt payments and amortization of premiums/discounts. Additional information about the County s long-term debt can be found in the notes to the financial statements on pages C-28 and C-42 to C-50 of this annual report. ECONOMIC FACTORS AFFECTING THE COUNTY Property tax is the largest source of revenue for the County. The mill levy of the County was 12.817 mills in 2017 (collected in 2018) and 13.302 mills in 2018 (collected in 2019). Property taxes to be collected in 2019 is projected to be 137.1 million, an increase of 12.7 million over the 2018 projected number of 124.4 million due to an increase in the assessed valuation. The County base mill levy was maintained at 15.821 mills with an additional levy of 0.085 mills for refunds and abatements. A temporary tax credit of 2.604 mills was also applied to keep property tax revenue within the limits required by law under the Taxpayer s Bill of Rights (TABOR). The residential assessment rate, which determines the amount of residential assessed value the mill levy is applied to, decreased to 7.20 from 7.96 for the 2017 reassessment period for collection in 2018. It is forecasted to decrease again in 2019 for the 2020 tax collections. This decrease will limit the amount of potential revenue to the County but overall declines are not expected. The unemployment rate for the County was 3.8 as of December 2018, which is an increase from 2.9 in December 2017. This rate is in line with the Denver metro unemployment rate of 3.6 and the State of Colorado rate of 3.6 . Although an increase from the prior year, the rate is still at historic lows and is below the national unemployment rate of 3.9 . Strong health and technology industries along with room to grow continue to make the area popular among companies and employees. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of Arapahoe County s finances for those with an interest in the government s financial activities. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Janet Kennedy, Director of Finance, 5334 South Prince Street, Littleton, CO 80120-1136, (303) 795-4620.
Tagged Passions:health, construction, equipment, finance, leasing, streets, taxes, Taxes, utility, development, capital spending, bond, historic, Utility, Capital Spending, Public Transit, water, purchasing, Technology, parks, trails, Development, technology, abatement, property, investment, information technology, financial report, property tax, easement, and Information Technology

Governmental Activities 2018 2017 Bonds 135,007,822 137,059,731 Certificates of Participation 13,198,045 17,307,225 Long-term Notes 5,098,430 6,281,757 Lease Purchase Agreements 13,720,978 15,317,619

Total Outstanding Debt 167,025,275 175,966,332

Tagged Passions:leasing, bond, and purchasing

Arapahoe County Government Summary of Outstanding Debt

Arapahoe County, Colorado Statement of Net Position

Primary Government Component Units_______________ _________________________________________________ Arapahoe County Governmental Arapahoe County Water and Wastewater
Tagged Passions:sewer, utility, Utility, and water

Activities E-911 Authority Airport Authority Authority_______________ _______________ _______________ _______________

Tagged Passions:911 and airport

Assets Cash and investments 161,534,543 5,833,206 6,211,588 31,521,616 Accounts receivable 16,257,498 372,127 1,156,811 2,290,394 Property tax receivable, net 160,742,579 - - - Accrued interest receivable 869,084 - - - Due from other governments 2,763,312 - 235,752 - Inventories 529,844 - - - Prepaid and other items 217,429 - 199,931 271,551 Restricted cash and investments 51,184,089 - 8,000,000 21,555,022_______________ _______________ _______________ _______________ Total non-capital assets 394,098,378 6,205,333 15,804,082 55,638,583_______________ _______________ _______________ _______________

No additional detail provided

Tagged Passions:taxes, Taxes, property, investment, and property tax

Non-depreciable capital assets 416,884,348 - 27,854,354 98,996,246 Depreciable capital assets 412,451,280 780,768 30,392,383 80,669,995_______________ _______________ _______________ _______________ Total capital assets 829,335,628 780,768 58,246,737 179,666,241_______________ _______________ _______________ _______________

Total assets 1,223,434,006 6,986,101 74,050,819 235,304,824_______________ _______________ _______________ _______________ Deferred outflows of resources Refunding of bonds 895,630 - - 1,883,318 Pension outflows 44,727,494 - - -_______________ _______________ _______________ _______________ Total deferred outflows of resources 45,623,124 - - 1,883,318_______________ _______________ _______________ _______________ Liabilities Accounts payable and other current liabilities 25,916,444 170,814 419,177 5,825,701

Tagged Passions:retirement and bond

Accrued interest payable 744,138 - 117,260 568,182 Due to other governments 606,935 - - - Unearned revenue 7,915,765 - 2,770 - Noncurrent liabilities: Long term debt due within one year 9,824,124 - 714,070 3,717,297 Long term debt due in more than one year 172,667,815 - 7,285,930 116,379,309 Net pension liability 177,086,029 - - - Estimated claims payable greater than one year 2,169,000 - - -_______________ _______________ _______________ _______________

Total liabilities 396,930,250 170,814 8,539,207 126,490,489_______________ _______________ _______________ _______________ Deferred inflows of resources Property tax revenue 160,742,579 - - - Pension inflows 13,719,386 - - -_______________ _______________ _______________ _______________ Total deferred inflows of resources 174,461,965 - - -_______________ _______________ _______________ _______________ Net position Net investment in capital assets 662,881,767 780,768 58,077,318 65,354,799 Restricted for: TABOR reserve 7,484,595 - - - Transportation projects 4,159,928 - - - Debt service and reserves 1,200,000 - - 7,674,873 Capital projects - - - 3,477,654 Park development 1,129,134 - - - Parks, recreation and open space 1,247,980 - - - Open space, parks and trails 42,861,689 - - - Developer contributions 15,015 - - - Law enforcement 6,807,717 - - - Electronic filing technology 617,062 - - - Unrestricted (30,739,972) 6,034,519 7,434,294 34,190,327_______________ _______________ _______________ _______________ Total net position 697,664,915 6,815,287 65,511,612 110,697,653_______________ _______________ _______________ ______________________________ _______________ _______________ _______________ The notes to the financial statements are an integral part of this statement. C-1

Tagged Passions:finance, retirement, taxes, Taxes, development, capital spending, public safety, Capital Spending, transportation, Technology, parks, trails, Development, technology, property, investment, financial report, property tax, and recreation

Arapahoe County, Colorado Statement of Activities

For the Year Ended December 31, 2018 Program Revenues_________________________________________________ Operating Capital Charges for Grants and Grants and
Tagged Passions:grant and program

Functions/Programs Expenses Services Contributions Contributions______________________________ _______________ _______________ _______________ _______________ Primary Government General government 69,320,281 29,533,354 332,855 - Public safety 99,859,375 31,738,589 1,893,598 431,223 Judicial services 15,143,028 - 130,023 - Health and welfare 106,223,692 565,584 72,177,853 8,938 Highways and streets 28,882,804 939,266 11,113,339 1,841,745 Water and wastewater 3,559,558 - - - Culture and recreation 27,661,147 1,049,356 595,963 684,236 Interest on long-term debt 7,045,569 - - -_______________ _______________ _______________ _______________

Total governmental activities 357,695,454 63,826,149 86,243,631 2,966,142_______________ _______________ _______________ _______________ Component Units E-911 3,705,380 3,817,677 - - Arapahoe County Airport Authority 9,572,483 7,403,700 431,521 - Arapahoe County Water and
Tagged Passions:health, sewer, 911, airport, streets, utility, Utility, public safety, services, program, water, and recreation

Wastewater Authority 19,875,172 20,796,413 - 10,609,229_______________ _______________ _______________ _______________ Total component units: 33,153,035 32,017,790 431,521 10,609,229_______________ _______________ _______________ _______________

General revenues Property taxes Sales tax Other taxes Investment income Build America Bonds credit Miscellaneous Total general revenue Change in net position Net position - beginning Net position - ending The notes to the financial statements are an integral part of this statement. C-2

Tagged Passions:finance, sewer, sale, taxes, Taxes, bond, property, investment, financial report, and property tax

Arapahoe County, Colorado Statement of Activities

For the Year Ended December 31, 2018 Net (Expense) Revenue and Changes in Net Position__________________________________________________________________ Component Units_______________ _________________________________________________ Primary Arapahoe County Government Arapahoe County Water and Wastewater
Tagged Passions:sewer, utility, Utility, and water

Total E-911 Authority Airport Authority Authority Functions/Programs_______________ _______________ _______________ _______________ ______________________________ Primary Government

Tagged Passions:911 and airport

(39,454,072) - - - General government (65,795,965) - - - Public safety (15,013,005) - - - Judicial services (33,471,317) - - - Health and welfare (14,988,454) - - - Highways and streets (3,559,558) - - - Water and wastewater

No additional detail provided

Tagged Passions:health, sewer, streets, utility, Utility, public safety, services, and water

(25,331,592) - - - Culture and recreation (7,045,569) - - - Interest on long-term debt_______________ _______________ _______________ _______________

No additional detail provided

Tagged Passions:recreation

(204,659,532) - - - Total governmental activities_______________ _______________ _______________ _______________

No additional detail provided

Component Units - 112,297 - - E-911 - - (1,737,262) - Arapahoe County Airport Authority

No additional detail provided

Tagged Passions:911 and airport

Arapahoe County Water and - - - 11,530,470 Wastewater Authority_______________ _______________ _______________ _______________ - 112,297 (1,737,262) 11,530,470 Total component units:_______________ _______________ _______________ _______________

207,240,655 81,868 78,239 2,584,691 Total general revenue_______________ _______________ _______________ _______________ 2,581,123 194,165 (1,659,023) 14,115,161 Change in net position 695,083,792 6,621,122 67,170,635 96,582,492 Net position - beginning_______________ _______________ _______________ _______________ 697,664,915 6,815,287 65,511,612 110,697,653 Net position - ending_______________ _______________ _______________ ______________________________ _______________ _______________ _______________ C-3 Arapahoe County, Colorado Balance Sheet Governmental Funds December 31, 2018 Social Open Spaces Other General Services Sales Tax Governmental_____________ ________________ ________________ ________________

Tagged Passions:funding, sewer, sale, taxes, Taxes, utility, Utility, services, and water

Assets Cash and investments 57,294,218 16,633,632 - 58,327,154 Restricted cash and investments 53,507 - 49,930,582 1,200,000 Accounts receivable 8,018,176 2,902,557 4,356,972 4,557,513 Taxes receivable, net 111,269,918 13,580,554 - 35,892,107 Due from other funds 916,235 - - - Prepaid items 5,284 10,546 - 1,600 Inventories 1,931 - - 82,289_____________ _____________ _____________ _____________

Total assets 177,559,269 33,127,289 54,287,554 100,060,663_____________ _____________ _____________ __________________________ _____________ _____________ _____________ Liabilities Accounts payable 3,142,891 1,245,817 11,346,140 3,734,888 Accrued expenditures 1,372,583 2,317,010 79,725 1,042,819 Due to other governments 160,307 48,622 - 50 Due to other funds - - - 916,235 Unearned revenue - other 131,331 6,070,844 - 1,713,590_____________ _____________ _____________ _____________ Total liabilities 4,807,112 9,682,293 11,425,865 7,407,582_____________ _____________ _____________ _____________ Deferred inflows of resources Deferred property tax revenue 111,269,918 13,580,554 - 35,892,107 Unavailable revenue-delinquent property taxes 19,551 - - - Unavailable revenue-grants - - - 395,785_____________ _____________ _____________ _____________ Total deferred inflows of resources 111,289,469 13,580,554 - 36,287,892_____________ _____________ _____________ _____________ Fund balances (deficits) Nonspendable 7,215 10,546 - 83,889 Restricted 7,258,016 - 42,861,689 15,403,414 Committed - - - 33,517,748 Assigned 9,137,938 9,853,896 - 8,215,880 Unassigned 45,059,519 - - (855,742)_____________ _____________ _____________ _____________

Tagged Passions:funding, grant, taxes, Taxes, property, investment, and property tax

Total fund balances (deficits) 61,462,688 9,864,442 42,861,689 56,365,189_____________ _____________ _____________ _____________

No additional detail provided

Total liabilities, deferred inflows of resources and fund balance 177,559,269 33,127,289 54,287,554 100,060,663_____________ _____________ _____________ __________________________ _____________ _____________ _____________

The notes to the financial statements are an integral part of this statement. C-4 Arapahoe County, Colorado Balance Sheet Governmental Funds December 31, 2018 Total Governmental________________ Assets 132,255,004 Cash and investments 51,184,089 Restricted cash and investments 19,835,218 Accounts receivable 160,742,579 Taxes receivable, net 916,235 Due from other funds 17,430 Prepaid items 84,220 Inventories_____________ 365,034,775 Total assets__________________________ Liabilities 19,469,736 Accounts payable 4,812,137 Accrued expenditures 208,979 Due to other governments 916,235 Due to other funds
Tagged Passions:funding, finance, taxes, Taxes, investment, and financial report

7,915,765 Unearned revenue - other_____________ 33,322,852 Total liabilities_____________

Deferred inflows of resources 160,742,579 Deferred property tax revenue 19,551 Unavailable revenue-delinquent property taxes 395,785 Unavailable revenue-grants_____________

Tagged Passions:taxes, Taxes, property, and property tax

161,157,915 Total deferred inflows of resources_____________

Fund balances (deficits) 101,650 Nonspendable 65,523,119 Restricted 33,517,748 Committed 27,207,714 Assigned 44,203,777 Unassigned_____________ 170,554,008 Total fund balances (deficits)_____________

Total liabilities, deferred inflows of resources 365,034,775 and fund balance__________________________

C-5 Amounts reported for governmental activities in the Statement of Net Position (page C-1) are different because:

Total fund balances - governmental funds (page C-5) 170,554,008 Capital assets used in governmental activities are not financial

No additional detail provided

Tagged Passions:funding and finance

resources and, therefore, are not reported in the funds. 818,090,243 The deferred charge on refunding of bonds is not an available

No additional detail provided

Tagged Passions:funding and bond

resource and, therefore, is not reported in the funds. 895,630 The deferred pension outflow is not an available resource and,

therefore, is not reported in the funds. 44,727,494 The deferred pension inflows are not an available

Tagged Passions:funding and retirement

to pay for current period, and therefore, not reported in the funds (13,719,387) Other long-term assets are not available to pay for current-period

No additional detail provided

Tagged Passions:funding

expenditures and, therefore, are deferred in the funds. 415,336 Internal service funds are used by management to charge the cost of

insurance and other services to indvidual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 37,583,957 Long-term liabilities, including bonds payable, certificates of participation, notes payable, capital leases, landfill post closure cost payable, compensated absences, net pension liabililty and accrued interest, are not due and payable in the current period and, therefore, are not reported in the funds. (360,882,366) Net position of governmental activities 697,664,915 The notes to the financial statements are an integral part of this statement.

Tagged Passions:funding, finance, leasing, retirement, landfill, bond, solid waste, services, insurance, and financial report

Arapahoe County, Colorado Reconciliation of the Balance Sheet of Governmental Funds

To the Statement of Net Position December 31, 2018 C-6
Tagged Passions:funding

Arapahoe County, Colorado Statement of Revenues, Expenditures and Changes in Fund Balance

Governmental Funds For the Year Ended December 31, 2018 Social Open Spaces Other General Services Sales Tax Governmental_____________ ________________ ________________ ________________ Revenues Taxes
Tagged Passions:funding, sale, taxes, Taxes, and services

Property taxes 107,760,430 13,114,432 - 35,994,915 Sales tax - - 27,911,710 - Other taxes 7,476,139 972,811 - 2,362,255

No additional detail provided

Tagged Passions:911, sale, taxes, Taxes, property, and property tax

Licenses and permits 7,326,257 - - 939,264 Intergovernmental 4,520,766 48,990,985 - 34,645,708 Charges for services 49,260,656 14,001 468,673 2,316,639 Fines and forfeitures 423,357 - - 536,142 Investment earnings 3,515,983 - 806,471 382,157 Interfund revenues and rentals 4,120,783 - - 44,521 Developer contributions - - - 882,710 Build America Bonds credit - - - 1,084,245 Miscellaneous 3,259,146 790,339 454,718 1,199,452_____________ _____________ _____________ _____________

Total revenue 187,663,517 63,882,568 29,641,572 80,388,008_____________ _____________ _____________ _____________ Expenditures Current Total current 167,588,083 59,877,538 24,886,835 66,847,321_____________ _____________ _____________ _____________

Tagged Passions:bond, services, rental, investment, license, and intergovernmental

Capital General government 1,414,972 - - 2,177,574 Public safety 176,081 - - 3,377,224 Judicial services - - - 82,607 Health and welfare 24,739 2,592,822 - 829,984 Highways and streets - - - 1,011,346 Culture and recreation - - 1,850,944 -_____________ _____________ _____________ _____________

Total capital 1,615,792 2,592,822 1,850,944 7,478,735_____________ _____________ _____________ _____________

Tagged Passions:health, streets, public safety, services, and recreation

Total debt service - - - 15,783,719_____________ _____________ _____________ _____________

Total expenditures 169,203,875 62,470,360 26,737,779 90,109,775_____________ _____________ _____________ _____________ Excess (deficiency) of revenues over (under) expenditures 18,459,642 1,412,208 2,903,793 (9,721,767)_____________ _____________ _____________ _____________

Other financing sources (uses) Transfers in 1,478,732 - - 22,688,487 Transfers out (16,284,930) (1,485,448) (61,500) (8,035,482)_____________ _____________ _____________ _____________

Total other financing sources (uses) (14,806,198) (1,485,448) (61,500) 14,653,005_____________ _____________ _____________ _____________ Net change in fund balance 3,653,444 (73,240) 2,842,293 4,931,238 Fund balance - beginning 57,809,244 9,937,682 40,019,396 51,433,951 _____________ _____________ _____________ _____________ Fund balance - ending 61,462,688 9,864,442 42,861,689 56,365,189_____________ _____________ _____________ __________________________ _____________ _____________ _____________ The notes to the financial statements are an integral part of this statement. C-8
Tagged Passions:finance and financial report

Arapahoe County, Colorado Statement of Revenues, Expenditures and Changes in Fund Balance

Governmental Funds For the Year Ended December 31, 2018 Total Governmental________________ Revenues Taxes 156,869,777 Property taxes 27,911,710 Sales tax 10,811,205 Other taxes 8,265,521 Licenses and permits
Tagged Passions:funding, 911, sale, taxes, Taxes, property, license, and property tax

88,157,459 Intergovernmental 52,059,969 Charges for services

Tagged Passions:services and intergovernmental

959,499 Fines and forfeitures 4,704,611 Investment earnings 4,165,304 Interfund revenues and rentals

882,710 Developer contributions 1,084,245 Build America Bonds credit 5,703,655 Miscellaneous_____________ 361,575,665 Total revenue_____________ Expenditures Current

Tagged Passions:bond, rental, and investment

64,884,087 General government 89,267,881 Public safety 14,979,860 Judicial services

No additional detail provided

Tagged Passions:public safety and services

102,785,922 Health and welfare 20,709,299 Highways and streets

No additional detail provided

Tagged Passions:health and streets

108,518 Water and wastewater 26,464,210 Culture and recreation_____________

319,199,777 Total current_____________ Capital 3,592,546 General government 3,553,305 Public safety 82,607 Judicial services 3,447,545 Health and welfare 1,011,346 Highways and streets 1,850,944 Culture and recreation_____________ 13,538,293 Total capital_____________

Tagged Passions:health, sewer, streets, utility, Utility, public safety, services, and water

Debt 8,193,408 Principal 7,586,761 Interest

3,550 Debt administration fees_____________ 15,783,719 Total debt service_____________ 348,521,789 Total expenditures_____________ Excess (deficiency) of revenues over (under) 13,053,876 expenditures_____________

Other financing sources (uses) 24,167,219 Transfers in

(25,867,360) Transfers out_____________ (1,700,141) Total other financing sources (uses)_____________

No additional detail provided

11,353,735 Net change in fund balance

159,200,273 Fund balance - beginning _____________

No additional detail provided

170,554,008 Fund balance - ending__________________________

C-9 Amounts reported for governmental activities in the Statement of Activities (page C-3) are different because: Net Change in Fund Balances - total governmental funds (page C-9) 11,353,735 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period. (9,256,268) The Statement of Activities reports losses arising from the sale of capital assets. Conversely, governmental funds do not report any losses on the sale of capital assets. (1,747) The net effect of various miscellaneous transactions involving the valuation of donated assets is to increase net position. 1,390,258

Tagged Passions:funding and sale

Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 415,336

The repayment of the principal of long-term debt consumes the current financial resources
Tagged Passions:funding and finance

of governmental funds, however, there is no effect on net position. 8,193,408

Governmental funds report the effect of premiums, discounts, and deferred loss on refunding when debt is first issued, whereas these amounts are amortized in the Statement of Activities. 505,978
Tagged Passions:funding

Some revenues reported in the governmental funds have been reported in the Statement of Activities in prior periods. (745,666)

No additional detail provided

Tagged Passions:funding

Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (10,863,646)

The internal service funds are used by management to charge the costs of insurance and other services to individual funds. The net expense of certain activities of internal service funds is reported with governmental activities. 1,589,735

Tagged Passions:funding, finance, services, and insurance

Change in net position of governmental activities 2,581,123

The notes to the financial statements are an integral part of this statement.
Tagged Passions:finance and financial report

Arapahoe County, Colorado Reconciliation of the Statement of Revenues

Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended December 31, 2018 C-10
Tagged Passions:funding

Arapahoe County, Colorado General Fund

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2018 Budgeted Amounts______________________________ Variance Original Final Actual with Final Budget_____________ ________________ ________________ ________________ Revenues Taxes Property taxes 107,196,502 107,196,502 107,760,430 563,928 Other taxes 7,500,000 7,500,000 7,476,139 (23,861) Licenses and permits 7,213,710 7,213,710 7,326,257 112,547 Intergovernmental 2,522,136 2,944,799 4,520,766 1,575,967 Charges for services 45,642,396 46,582,986 49,260,656 2,677,670 Fines and forfeitures 757,901 757,901 423,357 (334,544) Investment earnings 2,400,000 2,400,000 3,515,983 1,115,983 Interfund revenues and rentals 4,452,338 4,455,610 4,120,783 (334,827) Miscellaneous 1,920,588 2,810,024 3,259,146 449,122_____________ _____________ _____________ _____________ Total revenue 179,605,571 181,861,532 187,663,517 5,801,985_____________ _____________ _____________ _____________ Expenditures Current General government Administrative services 5,733,518 5,989,065 5,506,923 482,142 Assessor's Office 5,566,779 5,586,316 5,085,353 500,963 Board of County Commissioners 1,068,751 1,068,751 1,047,718 21,033 BOCC-Administration 655,887 658,296 571,316 86,980 Clerk and Recorder's Office 12,357,619 12,848,482 11,509,399 1,339,083 Communication Services Department 1,415,858 1,492,352 1,412,419 79,933 County Attorney 2,809,603 2,854,909 2,833,848 21,061 Facilities and Fleet Management 8,648,843 8,690,439 8,405,766 284,673 Finance 3,439,846 3,341,517 3,161,967 179,550 Human Resources 2,059,296 2,085,040 1,997,337 87,703 Information Technology 13,595,590 13,504,559 11,270,970 2,233,589 Office of Performance Management 426,378 426,378 386,489 39,889 Open Spaces Intergovernmental Relations 45,206 45,206 41,225 3,981 Public Works and Development 7,936,080 8,394,818 7,711,578 683,240 Treasurer's Office 2,135,193 2,183,973 1,948,866 235,107_____________ _____________ _____________ _____________ Total general government 67,894,447 69,170,101 62,891,174 6,278,927_____________ _____________ _____________ _____________ Public safety 78,677,185 80,124,698 77,810,017 2,314,681 Judicial services 14,639,301 14,749,324 14,748,760 564 Health and welfare 10,426,282 10,436,972 10,287,970 149,002_____________ _____________ _____________ _____________ Total current 171,637,215 174,481,095 165,737,921 8,743,174_____________ _____________ _____________ _____________
Tagged Passions:health, finance, legal, budget, taxes, Taxes, development, public safety, services, performance, Technology, Development, communications, technology, rental, Public Works, public works, property, investment, Treasurer, license, TREASURER, human resources, Communications, information technology, intergovernmental, property tax, and Information Technology

Capital General government - - 1,414,972 (1,414,972) Public safety 2,671 147,122 176,081 (28,959) Health and welfare - 28,700 24,739 3,961_____________ _____________ _____________ _____________

Total capital 2,671 175,822 1,615,792 (1,439,970)_____________ _____________ _____________ _____________ Total expenditures 171,639,886 174,656,917 167,353,713 7,303,204_____________ _____________ _____________ _____________ Excess (deficiency) of expenditures 7,965,685 7,204,615 20,309,804 13,105,189_____________ _____________ _____________ _____________

Tagged Passions:health and public safety

Other financing sources (uses) Transfers in - 1,478,732 1,478,732 - Transfers out (17,615,632) (18,362,930) (18,362,930) -_____________ _____________ _____________ _____________

Total other financing sources (uses) (17,615,632) (16,884,198) (16,884,198) -_____________ _____________ _____________ _____________ Net change in fund balance (9,649,947) (9,679,583) 3,425,606 13,105,189 Fund balance - beginning 39,800,256 39,800,256 39,800,256 -_____________ _____________ _____________ _____________ Fund balance - ending 30,150,309 30,120,673 43,225,862 13,105,189_____________ _____________ _____________ __________________________ _____________ _____________ _____________ The notes to the financial statements are an integral part of this statement. C-12 Arapahoe County, Colorado Social Services Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2018 Budgeted Amounts______________________________ Variance Original Final Actual with Final Budget_____________ ________________ ________________ ________________ Revenues Taxes Property taxes 13,083,336 13,083,336 13,114,432 31,096 Other taxes 950,000 950,000 972,811 22,811 Total revenue 58,655,500 62,348,802 63,882,568 1,533,766_____________ _____________ _____________ _____________
Tagged Passions:finance, budget, social services, taxes, Taxes, services, property, financial report, and property tax

Expenditures Current Health and welfare 59,495,744 60,205,882 59,877,538 328,344

Tagged Passions:health

Capital Health and welfare 50,978 2,710,744 2,592,822 117,922_____________ _____________ _____________ _____________

Total expenditures 59,546,722 62,916,626 62,470,360 446,266_____________ _____________ _____________ _____________ Excess (deficiency) of revenues over (under) expenditures (891,222) (567,824) 1,412,208 1,980,032_____________ _____________ _____________ _____________

Tagged Passions:health

Other financing sources (uses) Transfers out (34,200) (1,508,432) (1,485,448) 22,984_____________ _____________ _____________ _____________

Total other financing sources (uses) (34,200) (1,508,432) (1,485,448) 22,984_____________ _____________ _____________ _____________ Net change in fund balance (925,422) (2,076,256) (73,240) 2,003,016 Fund balance - beginning 9,937,682 9,937,682 9,937,682 -_____________ _____________ _____________ _____________ Fund balance - ending 9,012,260 7,861,426 9,864,442 2,003,016_____________ _____________ _____________ __________________________ _____________ _____________ _____________ The notes to the financial statements are an integral part of this statement. C-13 Arapahoe County, Colorado Open Spaces Sales Tax Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2018 Budgeted Amounts______________________________ Variance Original Final Actual with Final Budget_____________ ________________ ________________ ________________ Revenues Sales tax 25,792,000 25,792,000 27,911,710 2,119,710 Charges for services 302,000 302,000 468,673 166,673 Investment earninings 300,000 300,000 806,471 506,471 Miscellaneous 30,301 482,774 454,718 (28,056)_____________ _____________ _____________ _____________ Total revenue 26,424,301 26,876,774 29,641,572 2,764,798_____________ _____________ _____________ _____________ Expenditures Current Culture and recreation 23,587,800 62,895,653 24,886,835 38,008,818
Tagged Passions:finance, 911, budget, sale, taxes, Taxes, services, investment, financial report, and recreation

Capital Culture and recreation 2,835,000 3,938,940 1,850,944 2,087,996_____________ _____________ _____________ _____________

Total expenditures 26,422,800 66,834,593 26,737,779 40,096,814_____________ _____________ _____________ _____________ Excess (deficiency) of revenues over (under) expenditures 1,501 (39,957,819) 2,903,793 42,861,612_____________ _____________ _____________ _____________

Tagged Passions:recreation

Other financing sources (uses) Transfers out (1,500) (61,500) (61,500) -_____________ _____________ _____________ _____________

Total other financing sources (uses) (1,500) (61,500) (61,500) -_____________ _____________ _____________ _____________ Net change in fund balance 1 (40,019,319) 2,842,293 42,861,612 Fund balance - beginning 40,019,396 40,019,396 40,019,396 -_____________ _____________ _____________ _____________ Fund balance - ending 40,019,397 77 42,861,689 42,861,612_____________ _____________ _____________ __________________________ _____________ _____________ _____________ The notes to the financial statements are an integral part of this statement. C-14
Tagged Passions:finance and financial report

Arapahoe County Government Statement of Net Position

Proprietary Funds December 31, 2018
Tagged Passions:funding

Governmental Activities Internal Service

Funds_______________ Assets Current assets Cash and investments 29,279,539 Accounts receivable 54,678 Deposit 200,000 Inventory 445,624_______________ Total current assets 29,979,841_______________ Noncurrent assets Capital assets Buildings and improvements 17,628 Vehicles and equipment 38,032,525 Computer systems 5,703,343 Furniture and office equipment 66,738

Tagged Passions:equipment and investment

Less: accumulated depreciation (32,574,849)_______________ Total noncurrent assets (net of accum. dep.) 11,245,385_______________

No additional detail provided

Total assets 41,225,226_______________

Liabilities Current liabilities Accounts payable 476,769 Estimated claims payable 995,500

Noncurrent claims payable 2,169,000_______________ Total liabilities 3,641,269_______________

Net position Net investment in capital assets 11,245,385 Unrestricted 26,338,572_______________ Total net position 37,583,957______________________________ The notes to the financial statements are an integral part of this statement. C-15
Tagged Passions:finance, investment, and financial report

Arapahoe County Government Statement of Revenues, Expenses and Changes in Net Position

Proprietary Funds For the Year Ended December 31, 2018
Tagged Passions:funding

Governmental Activities Internal Service

Funds_______________ Operating revenues Charges for sales and service 10,034,181_______________

Tagged Passions:sale

Total operating revenue 10,034,181_______________

Operating expenses Cost of sales and services 6,093,095 Administration 194,896 Depreciation 4,404,778_______________
Tagged Passions:sale and services

Total operating expenses 10,692,769_______________

Operating income (loss) (658,588)_______________

Nonoperating revenue (expenses) Insurance recoveries 25,644 Gain on sale of assets 523,493 Loss on sale of assets (955)_______________ Income before contributions and transfers (110,406)_______________ Transfers in 1,899,118 Transfers out (198,977)_______________ Change in net position 1,589,735

Tagged Passions:sale and insurance

Total net position - beginning 35,994,222_______________ Total net position - ending 37,583,957______________________________

The notes to the financial statements are an integral part of this statement. C-16

Tagged Passions:finance and financial report

Arapahoe County, Colorado Statement of Cash Flows

Proprietary Funds For the Year Ended December 31, 2018
Tagged Passions:funding

Governmental Activities Internal Service

Funds Cash flows from operating activities Cash received for interfund services provided 10,040,397 Cash payments for services and supplies (6,558,713) Net cash provided by operating activities 3,481,684 Cash flows from noncapital financing activities Transfers in from other funds 1,899,118 Transfers out to other funds (198,976) Net cash provided by non capital financing activities 1,700,142 Cash flows from capital and related financing activities Acquisition of property and equipment (5,396,498) Proceeds from sale of capital assets 539,066 Insurance Proceeds 25,644 Net cash used for capital and related financing activities (4,831,788) Net increase in cash and investments 350,039 Cash and Investments, January 1, 2018 28,929,501 Cash and Investments, December 31, 2018 29,279,540 Reconciliation of operating loss to net cash provided by operating activities:

Tagged Passions:funding, equipment, sale, services, insurance, property, and investment

Operating income (loss) (658,589) Adjustments to reconcile operating loss to

net cash provided by operating activities: Depreciation expense 4,404,778 (Increase) decrease in current assets: Accounts receivable 6,216 Inventory (35,468) Increase (decrease) in current liabilities: Accounts payable (76,953) Claims payable (158,300) Total Adjustments 4,140,273 Net cash provided by operating activities 3,481,684 The notes to the financial statements are an integral part of this statement. C-17

Tagged Passions:finance and financial report

Arapahoe County, Colorado Statement of Fiduciary Net Position

Fiduciary Funds December 31, 2018 Arapahoe County Agency Funds Retirement Trust Total
Tagged Passions:funding, retirement, and seniors

Assets Cash and investments: - 34,354,859

Restricted escrow - 498,162 Investments:

Tagged Passions:investment

Money market funds 6,014,930 - Equity securities 79,975,077 - Real estate investments 80,675,044 - Fixed income securities 44,089,028 - Hedge Funds 12,993,294 - International Equity 53,073,263 - Private Equity 7,316,438 -

No additional detail provided

Tagged Passions:funding, market, and investment

Total cash and investments 284,137,074 34,853,021

No additional detail provided

Tagged Passions:investment

Receivables: Dividends and interest - - Property taxes - 877,427,814

No additional detail provided

Tagged Passions:taxes, Taxes, property, and property tax

Other assets - 33,644 Total assets 284,137,074 912,314,479

Liabilities Accounts payable 88,818 68,041 Due to other governments - 11,608,467 Other deposits payable - 893,319,487 Warrants payable - 7,318,484
Tagged Passions:public safety

Total liabilities 88,818 912,314,479

No additional detail provided

Net Position Net position restricted for pensions 284,048,256

The notes to the financial statements are an integral part of this statement. C-18
Tagged Passions:finance, retirement, and financial report

Arapahoe County, Colorado Statement of Changes in Fiduciary Net Position

Fiduciary Funds For the Year Ended December 31, 2018 Arapahoe County Retirement Trust ADDITIONS Contributions: Employer 10,442,318 Plan Members 10,436,036 Total Contributions 20,878,354 Investment Income: Net Appreciation in Fair Value of Investments (16,277,229) Interest and Dividends 5,736,492
Tagged Passions:funding, retirement, seniors, and investment

Total Investment Income (10,540,737) Investment Expenses (1,746,897)

No additional detail provided

Tagged Passions:investment

Net Investment Income (12,287,634)

No additional detail provided

Tagged Passions:investment

Total Additions 8,590,720

No additional detail provided

DEDUCTIONS Benefits to Plan Members 25,146,993 Refund of Contributions 4,060,659 Administrative Expenses 393,580

No additional detail provided

Total Deductions 29,601,232

Change in Net Position (21,010,512)

Net Position - Beginning of Year 305,058,768 Net Position - End of Year 284,048,256

The notes to the financial statements are an integral part of this statement. C-19 Arapahoe County, Colorado Notes to the Financial Statements C-21 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of Arapahoe County, Colorado (the County) is presented to assist in understanding the County's financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (US GAAP) as applied to government units; and have been consistently applied in the preparation of the financial statements. The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. The following is a summary of the significant accounting policies of the County. Financial Reporting Entity Arapahoe County was incorporated under the laws of the State of Colorado in 1902. The County provides a wide range of services to its residents including public safety, highways and streets, parks and open space, conservation, health and social services, public improvements and general administration. The County is governed by an elected five-member Board of County Commissioners. The Board of County Commissioners serves as the administrative and policy-making body of the County. The primary government of the County includes the activities of six other elected officials the Assessor, Clerk and Recorder, Coroner, District Attorney, Treasurer, and the Sheriff. The accompanying financial statements present the financial activities of the County and its component units. The Governmental Accounting Standards Board (GASB) has specified the criteria used in defining the financial reporting entity: The financial reporting entity consists of the primary government and its component units. A primary government is any state, general-purpose local or special-purpose government, which meets the following criteria: a) it has a separately elected governing body; b) it is legally separate; and c) it is fiscally independent of other state and local governments. A primary government consists of all the organizations that make up its legal entity. All funds, organizations, institutions, agencies, departments, and offices that are not legally separate are, for financial reporting purposes, part of the primary government. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. The primary government is financially accountable if it appoints a voting majority of the organization s governing body and (1) it is able to impose its will on that organization or (2) there is a financial benefit or burden relationship with the primary government. In addition, the primary government may choose to include an organization in the reporting entity that does not meet either of these criteria because the nature and significance of the component unit s relationship with the primary government are such that exclusion would cause the reporting entity s financial statements to be misleading or incomplete. Blended Component Units
Tagged Passions:funding, health, finance, legal, streets, appointments, social services, voting, public safety, services, Conservation, parks, Treasurer, TREASURER, policy, financial report, and coroner

These financial statements present the County (the primary government) and its component units as required by US GAAP. The component units included in the County s reporting entity are reported using the blended and the discretely presented methods as appropriate for each component unit. The blended method reports the financial data of the component unit as part of the primary government. This method is used when any of the following circumstances are met:

1) The component unit s governing body is substantively the same as the governing body of the primary government; and a) there is a financial benefit or burden relationship between the primary government and the component unit or b) management of the primary government has operational responsibility for the component unit.

Tagged Passions:finance and financial report

2) The component unit provides services entirely or almost entirely to the primary government.

Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-22
Tagged Passions:finance, services, and financial report

3) The component unit s total debt outstanding, including leases, is expected to be repaid entirely or almost entirely with resources of the primary government.

The following entities are included in the financial statements as blended component units based upon meeting the criteria for blending and/or their significant financial and operational relationships to the County: Arapahoe County Law Enforcement Authority The Arapahoe County Law Enforcement Authority (ALEA) is a special district that provides law enforcement services in the unincorporated areas of the County. The Board of County Commissioners serves as the Board of the ALEA. The County Sheriff is the Chief Operating Officer. The Arapahoe County Law Enforcement Authority is reported as a Special Revenue Fund. Arapahoe County Housing Authority The Arapahoe County Housing Authority (the Authority) supports the improvement of housing conditions and community facilities for low and moderate-income individuals. The Board of County Commissioners serves as the entire board for the Authority. The County has all of the operational responsibilities for the Authority. The Authority is referred to in this Comprehensive Annual Financial Report (CAFR) as the Community Development Fund and is reported as a Special Revenue Fund. Arapahoe County Recreation District The Arapahoe County Recreation District (the District) is a special district that provides parks and recreation services in the Southeast part of the urbanized area of the County. The Board of County Commissioners serves as the entire board for the District and therefore makes all decisions controlling the District s activities and finances. The Arapahoe County Recreation District is reported as a Capital Projects Fund. Arapahoe County Water and Wastewater Public Improvement District - The Arapahoe County Water and Wastewater Public Improvement District (PID) was formed in 2001 to provide capital infrastructure funding for the service district located in the south central part of the County. In November 2001, the taxpayers within the PID voted to authorize the issuance of 165,000,000 in General Obligation Bonds to finance water and wastewater projects. The Board of County Commissioners maintains control over operations and fiscal matters since they serve as the ex officio Board of Directors for the PID. The Arapahoe County Water and Wastewater Public Improvement District is reported as a Capital Projects Fund.
Tagged Passions:funding, finance, sewer, leasing, utility, development, capital spending, bond, Utility, public safety, Capital Spending, services, water, parks, Development, financial report, recreation, community development, and housing

Arapahoe County Building Finance Corporation The Arapahoe County Building Finance Corporation (ACBFC) is a not-for-profit corporation that issues certificates of participation for funding the construction of facilities that are leased to the County through a lease purchase agreement. The Board of County Commissioners do not hold positions on the board for the ACBFC; however, the Board of County Commissioners appoints all members of the ACBFC board. The Arapahoe County Building Finance Corporation is reported as a Debt Service Fund.

Arapahoe County Retirement Trust Fund The Arapahoe County Retirement Trust Fund manages the retirement benefits for County employees. The Arapahoe County Retirement Plan (the Plan) is a single employer defined benefit pension plan established by the County to provide pension benefits for its employees. The Plan is administered by a Retirement Board consisting of five members: the incumbent County Treasurer, two County employees elected by plan members, and two registered electors of the County appointed by the Board of County Commissioners. The five- member Retirement Board reviews information about the County s retirement fund and is responsible for assessing the fund s fiscal health. The Plan is considered part of the County s financial reporting entity and is included as a blended component unit. The Arapahoe County Retirement Trust Fund is reported as a Fiduciary Fund. Discretely Presented Component Units Discrete component units are reported in separate columns on the government-wide financial statements to emphasize the legal separation between these organizations and the primary government. The following entities are included in the financial statements as discretely presented component units: Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-23 Arapahoe County Airport Authority The Arapahoe County Public Airport Authority (the Authority) is governed pursuant to the provisions of the Colorado Public Airport Authority Act. The Authority was formed for the statutory purposes of acquiring and improving an airport, air navigational facilities, and related facilities and for financing the cost of such acquisitions and improvements. The Authority operates Centennial Airport, which is located in Arapahoe and Douglas Counties. The Authority is governed by an eight-member board. The board is comprised of three Arapahoe County Commissioners and two additional members who are appointed by the Commissioners. These five members are the full voting board of the Authority. The Authority also includes three non-voting members who are appointed by the Douglas County Board of County Commissioners. The interrelationship in certain financing arrangements between the County and the Authority has resulted in a financial benefit/burden relationship. The County is legally obligated to assume the responsibility for payment of these financial arrangements in the event of default by the Authority; therefore, the County is financially accountable for the Authority. The Arapahoe County Airport Authority is included as a discrete component unit within the County s financial reporting entity. Arapahoe County Water and Wastewater Authority The Arapahoe County Water and Wastewater Authority (ACWWA) is a political subdivision that was created in 1988 pursuant to an intergovernmental agreement between Arapahoe County and the Arapahoe Water and Sanitation District (the District). ACWWA encompasses approximately 5,200 acres and provides water, wastewater, and storm water services to citizens and businesses within the service area to include Arapahoe County and parts of northern Douglas County. Other areas within ACWWA s service area include the Town of Foxfield and a residential subdivision in northwest Elbert County. In addition, ACWWA provides wholesale wastewater treatment services to the Cottonwood Water and Sanitation District in Douglas County. On February 6, 2002, the County entered into an intergovernmental agreement with the Arapahoe County Water and Wastewater Public Improvement District (PID). The PID was organized in 2001 pursuant to the provisions of the Colorado Revised Statutes Title 30, Article 20, Part 5 for the purpose of constructing certain public improvements to serve customers within and without its jurisdictional boundaries. The Intergovernmental Agreement (IGA) was amended and restated, in part to have the PID replace the District as a party to the IGA. The PID retains ACWWA as its management agency pursuant to this management agreement. In consideration for ACWWA s commitment to provide management service, the PID agreed to issue general obligations bonds, and certify a mill levy on property within the PID at a level sufficient to make the annual debt service payments as identified in the PID s annual capital plan, thus creating a financial benefit/burden relationship between ACWWA and the PID. ACWWA has no statutory authority to levy any taxes to finance the issuance of general obligation debt or for general operations.
Tagged Passions:funding, health, construction, business, finance, legal, sewer, leasing, airport, retirement, appointments, voting, taxes, Taxes, utility, bond, solid waste, Utility, seniors, subdivision, services, events, water, purchasing, property, Treasurer, TREASURER, financial report, intergovernmental, and stormwater

A
nine-member Board of Directors appointed by the Arapahoe County Board of Commissioners governs ACWWA. Two of the nine members are Board of County Commissioners. These two Board of County Commissioners appoint seven additional members to the Board, creating the nine-member board.

The Arapahoe County Water and Wastewater Authority is presented as a discrete component unit within the County s financial reporting entity. This component unit is separate and distinct from the Arapahoe County Water and Wastewater Public Improvement District (PID). E-911 Authority The Arapahoe County E-911 Emergency Communications Service Authority (E-911 Authority) was formed in 1987 by an Intergovernmental Agreement (IGA) between Arapahoe County and various cities, towns, and fire protection districts within Arapahoe County. The E-911 Authority was formed as a separate legal entity to fund the purchase and maintenance of the E-911 network for emergency communication service. The E-911 Authority includes all of Arapahoe County, with the exception of the City of Aurora. The E-911 Authority covers approximately 712 square miles and serves over 288,000 citizens. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-24 The E-911 Authority is governed by Colorado statutes and the IGA. The Board of Directors for the E-911 Authority are appointed to two-year terms by the Arapahoe County Board of County Commissioners pursuant to the IGA. The Board of Directors is comprised of five members: two representatives of the law enforcement community, two representatives from the fire rescue community and one at-large member. The County provides accounting and treasury services for the E-911 Authority although the E-911 Authority publishes its own budget. The E-911 Authority is included as a discretely presented component unit within the County s financial reporting entity. Complete financial reports are prepared for these component units with the exception of E-911 Authority. All financial information for these entities may be obtained at the following locations. Arapahoe County Airport Authority 7800 S. Peoria St. Englewood, CO 80112 www.centennialairport.com Arapahoe County Water and Wastewater Authority 13031 E. Caley Avenue Centennial, CO 80111 www.acwwa.org E-911 Authority 5334 S. Prince St. Littleton, CO 80120-1136

Tagged Passions:finance, legal, sewer, 911, airport, budget, appointments, utility, Utility, public safety, services, emergency, water, purchasing, communications, Communications, financial report, and intergovernmental

Government wide and Fund Financial Statements

The government-wide financial statements are designed to provide readers with a broad overview of the County s finances as a whole. These financial statements report information on all of the non-fiduciary activities of the primary government and its component units. The primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statements included in the government-wide financial statements are: The Statement of Net Position The Statement of Net Position presents information related to assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the net of all four categories being reported as the County s net position. The Statement of Activities The Statement of Activities presents information demonstrating the change in net position during the current fiscal year. The Statement of Activities reflects both the direct expenses and net cost of each function of the County s governmental activities. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include charges paid by the recipient for the goods or services offered by the program, grants, and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues of the County, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each government function is self-financing or draws from the general revenues of the County. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are taxes and other charges between the functions of the government, which have not been eliminated. Elimination of these charges would distort the direct costs and program revenues reported for the various functions. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-25

Tagged Passions:grant, finance, taxes, Taxes, services, program, and financial report

Separate government-wide and fund financial statements are presented, however, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. The fiduciary funds use the accrual basis of accounting, but have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grant awards and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the County s internal service funds are charges to the entity for services which include: postage, oil and gas, vehicles and insurance, and funding for the replacement of movable capital assets. Operating expenses include administrative expenses, cost of sales and services, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Governmental Funds Governmental funds are used to account for the County s governmental activities. Governmental fund financial statements are presented using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e., when they are both measurable and available). Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Most grant reimbursements, property taxes, franchise taxes, permits, licenses, and interest associated with the current fiscal year are considered to be susceptible to accrual and have been recognized as revenues of the current fiscal year. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, unmatured interest on general long-term debt is recognized when due, and expenditures related to compensated absences and claims and judgments are recognized when the obligations have matured (i.e., expected to be liquidated with expendable available financial resources). Capital asset acquisitions are reported as expenditures in governmental funds. The County reports the following major governmental funds:

Tagged Passions:funding, grant, recognition, finance, sale, taxes, Taxes, Fossil Fuels - Oil, services, insurance, property, license, financial report, and property tax

The General Fund is the County s primary operating fund. It accounts for all financial resources of the general

No additional detail provided

Tagged Passions:finance

government, except those that are properly accounted for in another fund.

The Social Services Fund is a special revenue fund that administers human services programs under state and

Tagged Passions:social services, services, and program

federal regulations. This fund accounts for the financial and protective services provided to children, families, and elderly and disabled adults. The Social Services Fund is funded primarily with local property tax as well as funds from other state and federal sources.

The Open Spaces Sales Tax Fund is a special revenue fund which accounts for the revenues received from the

Tagged Passions:funding, regulation, finance, sale, social services, disability, taxes, Taxes, services, property, and property tax

0.25 sales and use tax originally approved by the voters in 2003 for the acquisition, development, and maintenance of open space, trails, and parks. In 2011, the voters approved the extension of the program to 2023. Several grants have been obtained for specific purposes in addition to monies contributed on joint projects by other entities. These monies are restricted by grant documents and contracts to be used solely for these projects.

Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-26 Additionally, the County reports the following fund types: The Internal Service Funds account for operations that provide services to other departments or agencies of the County on a cost-reimbursement basis. The internal service funds provide services for postage, oil and gas, vehicles, and funding for the replacement of movable capital assets. Self-insurance programs for employee benefits, property, and liability are also accounted for in these funds. The Fiduciary Funds are used to account for resources held for the benefit of outside parties, including other

Tagged Passions:funding, grant, finance, sale, taxes, Taxes, Fossil Fuels - Oil, development, contract, services, program, insurance, parks, trails, Development, property, and financial report

governments. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County s own programs. The fiduciary funds reported by the County include the Retirement Trust Fund and Agency Funds.

The Retirement Trust Fund (the Plan) is a sponsored, single employer defined benefit plan. All permanent, full-time employees of the County are required to become members of the plan. The Agency Funds are custodial in nature and are used to account for assets that the County holds for others in an agency capacity (e.g., taxes collected by the Clerk and Recorder for the benefit of other governments). The Public Trustee s agency fund collects fees pertaining to foreclosures and deeds of trust. The Inmate Sentencing Fund holds funds on behalf of inmates. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, Net Position or Fund Balances Cash All cash within the County reporting entity is deposited with the County Treasurer, with the exception of: cash held for third parties in fiduciary funds, cash held by paying agents in the internal service funds, and cash held by certain discrete and blended component units. For the purpose of the cash flows statement, cash includes cash-on-hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. The County maintains pooled cash and investments for all funds. Negative cash balances have been reclassified as interfund payables. Investments Investments primarily consist of U.S. Treasury and agency obligations, corporate debt securities, and approved money market funds, all recorded at fair value. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Investments for which market quotations are not readily available are valued at their fair values as determined by the custodian under the direction of the plan with the assistance of a valuation service. Property Taxes Property taxes are not due and payable until after the assessment year has ended, and are not included in the budget or statement of revenues, expenditures, and fund balance of the assessment year. Property taxes are initially recorded as deferred inflows of resources in the year they are levied and measurable. These deferred property tax inflows of resources are recorded as revenue in the year they are collected. Property taxes are levied on or before December 15th of each year and attach as an enforceable lien on the property on January 1 of the subsequent year. Taxes are payable in full on April 30th or in two installments on February 28th and June 17th. The County bills and collects its own property taxes and the taxes for various other entities. Tax collection and distribution to the various taxing entities is done by the 10th of every month following the month of collection by the Treasurer. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-27
Tagged Passions:funding, finance, market, budget, sale, retirement, taxes, Taxes, seniors, program, property, investment, Treasurer, TREASURER, financial report, and property tax

Receivables/Payables

All trade and property tax receivables are shown net of an allowance for uncollectible. Property taxes receivable is shown net of an allowance for uncollectible of 1 . Balances that originate from current lending/borrowing arrangements between funds are referred to as due to/from other funds. Advances are non-current lending/borrowing between funds. Advances between funds, as reported in the fund financial statements, are shown as nonspendable fund balance in applicable County funds to indicate that they are not available for appropriation and are not expendable available financial resources.
Tagged Passions:funding, finance, taxes, Taxes, property, trade, financial report, and property tax

Accounts payable are generally recorded when the obligation is incurred. Debt service and claims and judgments are recorded when they become due.

Inventories and Prepaid Items

Inventories of certain items are valued at cost using a weighted average method. The costs of inventories in all other governmental funds are recorded as expenditures when purchased rather than when consumed.

Items recorded as prepaid items in both the government-wide and fund financial statements include certain payments to vendors that reflect costs applicable to future accounting periods. Capital Assets
Tagged Passions:funding, finance, purchasing, and financial report

Capital assets, which include land, buildings and improvements, furniture and equipment, construction in progress, and infrastructure assets (i.e., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental activities columns in the government-wide financial statements. Capital assets, other than infrastructure, are defined by the government as assets with an initial individual cost of 5,000 or more. Such assets are recorded at historical cost. As the government constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. In the case of donations, the government values these capital assets at the acquisition value of the item at the date of its donation. Capital assets of the primary government, as well as the component units, are depreciated using the straight-line method of depreciation over the following estimated useful lives: Assets Years Assets Years Bridges 75 Traffic Signals 30 Storm Drains 75 Land Improvements 25 Roads 40 Leasehold Improvements 20 Buildings and Improvements 40 Furniture and Equipment 20 Wells, Water and Sewer Mains 30 Vehicles 4-5 Treatment Plants 30 Compensated Absences
Tagged Passions:construction, equipment, finance, sewer, streets, historical, utility, donation, Utility, Donation, water, plant, financial report, Pedestrian, and traffic

It is the County s policy to permit employees to accumulate earned but unused vacation and sick leave benefits up to certain limits. There is also a policy whereby the County pays the employees, upon termination, for their allowed accumulated leave. Therefore, there is a liability on the government-wide financial statements for this unpaid accumulated leave. When the amount is actually paid upon termination, the expenditure is recorded within the governmental fund. The County also has contractual employment agreements with certain department heads. Some of these contracts contain separation agreements with compensation due at the conclusion of the relationship.

Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-28 Deferred Outflows/Inflows of Resources
Tagged Passions:compensation, finance, contract, employment, policy, and financial report

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The County has two items that qualify for reporting in this category. The first item that qualifies is the deferred charge on refunding of bonds reported in the government-wide Statement of Net Position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred pension outflows is the other item that is being presented as a deferred outflow of resources; see Note 14 for the deferred outflows of resources related to pensions.

No additional detail provided

Tagged Passions:recognition, finance, retirement, bond, and financial report

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The County has two types of items that qualify for the reporting in this category. One is for property tax revenue which is considered a deferred inflow of resources in the year the taxes are levied and measurable and are recognized as an inflow of resources in the period they are collected. Deferred pension inflows is the other item that is being presented as a deferred inflow of resources; see Note 14 for the deferred inflows of resources related to pensions.

Some items are considered deferred inflows of resources under the modified accrual basis of accounting and are only reported in the governmental funds. One item that qualifies for reporting in this category is the item unavailable revenue. The County reports unavailable revenue from several sources: grants and delinquent property taxes. These amounts are recognized as an inflow of resources in the period the revenue becomes available. Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Position. Long-term debt premiums and discounts are amortized over the term of the long- term debt. Long-term debt payable is reported net of the applicable unamortized premiums or discounts. Long-term debt issuance costs are reported as an expense when incurred. In the fund financial statements, the face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs are reported as debt service expenditures. Fund Balance In the fund financial statements, governmental funds report fund balance based on the extent to which the County is bound to honor constraints on the specific purpose for which funds can be spent. Fund balance classifications are based on the requirements of GASB Statement No. 54. Classifications are nonspendable, restricted, committed, assigned, and unassigned. Restricted amounts are not available for appropriation because they are legally restricted by an outside party for a specific purpose. Committed funds are funds reserved for a specific purpose by the Board of County Commissioners; funds cannot be committed or uncommitted without formal action - Board Resolution - by the Board. Assigned funds are assigned by the Board of County Commissioners for a specific purpose. Unassigned is a residual classification within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance. For further details on the various fund balance classifications, refer to Note 18. If both restricted and unrestricted amounts of fund balance are available for use when expenditure is incurred, it is County policy to use restricted amounts first and then unrestricted resources as they are needed. Unrestricted fund balance will be used in the following order: committed, assigned and unassigned. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-29 The Board of County Commissioners has a formal fund balance reserve policy. This policy is adopted through resolution each year for the purpose of maintaining a satisfactory level of unappropriated fund balance reserves in order to insure a continued strong financial position within the County and to conform to the requirements of the Taxpayer s Bill of Rights (TABOR). For this financial report, the amount of the Board reserves that pertains to TABOR has been separated from the total and is considered Restricted as per the definition above. The remaining amount does not meet the GASB Statement No. 54 requirements of a stabilization agreement. Instead, it is considered to be a minimum fund balance policy. Per GASB Statement No. 54, these amounts are required to be reported as part of Unassigned Fund Balance in the General Fund and Assigned Fund Balance in any other funds. The amounts approved by the Board Policy, excluding the TABOR portion, and included in Fund Balance are as follows: General Fund 20,619,083 Social Services 2,059,035 Arapahoe Law Enforcement Authority 1,435,368 Road Bridge 2,575,630 Net Position The County reports restricted net position when constraints placed on resources are (a) externally imposed by creditors, grantors, contributors, laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Enabling legislation authorizes the government to assess, levy, charge or otherwise mandate payment of resources (from external resource providers) and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. Net investment in capital assets is a portion of net position that represents the County s net investment in its capital assets. The portion of net position that is categorized as unrestricted has not been classified as either net investment in capital assets or restricted net position. Deficit Fund Balance The following funds had deficit fund balances at December 31, 2018: AD Works Fund ( 174,634), Community Development Fund ( 6,594), Grant Fund ( 361,714) and the Homeland Security Fund ( 229,375). The revenue to offset the deficits is currently reported as deferred inflows of resources because it is unavailable but will be recognized as earned revenue as soon as the funds are collected. Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. Encumbrance Accounting The County uses encumbrance accounting as an extension of its budgetary scheme. Encumbrances are recorded when a purchase order or contract is issued. They are reduced when the related expenditure/expense is made. Encumbrances lapse at year-end but may be re-established in the subsequent year if the budget related to the encumbrance is approved by the Board of County Commissioners to be re-appropriated to the subsequent year or if the subsequent year s budget is adequate to cover the amount of the rolled over encumbrance. The County does not restrict any fund balance for encumbrances unless those amounts are restricted for a specific purpose under GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-30 NOTE 2: RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

Tagged Passions:funding, grant, regulation, recognition, finance, streets, budget, retirement, social services, taxes, Taxes, security, development, contract, public safety, services, purchasing, Development, property, investment, policy, financial report, Immigration, property tax, and community development

A.
Explanation of certain differences between the governmental fund balance sheet and the government-

No additional detail provided

wide Statement of Net Position.

The governmental fund Balance Sheet includes a reconciliation between fund balance total governmental funds and net position governmental activities as reported in the government-wide Statement of Net Position. One element of that reconciliation explains that long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. The details of this ( 360,882,366) are as follows:

Tagged Passions:funding and bond

General Obligation Bonds Payable (133,660,000) Less: Net Bond Discount/(Premium) (1,347,822)

Tagged Passions:bond

Certificates of Participation Payable (12,205,000) Less: Premium on Certificate of Participation (993,045)

Note Payable (5,048,998) Less: Premium on Note Payable (49,432)

Capital Leases Payable (13,720,978) Landfill - Post Closure Costs Payable (4,913,424) Compensated Absences (10,553,240)

Total Long Term Debt (182,491,939) Accrued Interest Payable (744,138) Net Pension Liability (177,086,029) Social Services Advance from State (560,260) Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities (360,882,366) Another element of that reconciliation states, other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. The details of this 415,336 are as follows: Receivables:

Tagged Passions:funding, leasing, retirement, social services, landfill, solid waste, and services

Delinquent Property Taxes 19,551 Grants 395,785

Net adjustment to increase total governmental funds to arrive at net position - governmental activities 415,336 Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-31
Tagged Passions:funding, grant, finance, taxes, Taxes, property, financial report, and property tax

B.
Explanation of certain differences between the governmental fund statement of revenues, expenditures,

and changes in fund balances and the government-wide Statement of Activities. The governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net position of governmental activities as reported in the government-wide Statement of Activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. The details of this ( 9,256,268) difference are as follows: Capital Outlay 13,538,293 Depreciation Expense (22,794,561) Net adjustment to decrease net changes in fund balances -

Tagged Passions:funding

total governmental funds to arrive at changes in net position of governmental activities (9,256,268)

Another element of that reconciliation states that revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. The details of this 415,336 difference are as follows: Grants 395,785 Delinquent Property Taxes 19,551 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities. 415,336 Another element of that reconciliation states that some revenues reported in the governmental funds have been reported in the Statement of Activities in prior periods. The details of this ( 745,666) difference are as follows:

Tagged Passions:funding, grant, finance, taxes, Taxes, property, and property tax

Unavailable Revenue (745,666) Net adjustment to decrease net changes in fund balances - total

governmental funds to arrive at changes in net position of governmental activities. (745,666) Another element of that reconciliation states that some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. The details of this ( 10,863,644) difference are as follows:
Tagged Passions:funding and finance

Compensated Absences Expense 2,914,950 Pension Expense (23,416,355) Employer Contributions 10,442,318 Accrued Interest 23,093 Landfill Expense (827,650) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities. (10,863,644)

Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-32
Tagged Passions:funding, finance, retirement, landfill, solid waste, and financial report

NOTE 3: LEGAL COMPLIANCE - BUDGETS

No additional detail provided

Tagged Passions:legal, budget, and compliance

Budgets for the General, Special Revenue, Debt Service, and Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America (US GAAP) with the exception of the differences for the General Fund as described in Note 19. The budgets for the proprietary funds are not adopted on a basis consistent with accounting principles generally accepted in the United States of America (US GAAP), as capital outlay and debt service are budgeted as expenditures and bond proceeds, contributed capital and equity transfers are budgeted as revenues.

Arapahoe County utilizes the encumbrance method of recording commitments related to unperformed contracts for goods and services during the year. Due to the County's integrated accounting and budgetary control system, appropriations are considered to lapse at year-end. Related amounts are re-appropriated in the following year.
Tagged Passions:funding, budget, capital spending, bond, contract, Capital Spending, and services

On or before August 15th of each year, elected officers, directors and department heads submit revenue estimates and expenditure requests to the Budget Manager, the official charged with organizing an overall County budget for submission to the Board of County Commissioners. On or before August 25th of each year, the County Assessor submits the current total assessed valuations for all taxing entities in the County and the factors needed to compute the statutory property tax revenue limits. The Budget Manager then submits a balanced budget to the Board on or before October 15th.

The Board of County Commissioners posts and publishes notice that the budget has been received and is open for inspection by the public and notice of the date of the scheduled public hearing at which any elector of the County may register an objection to the proposed budget. The budget must be adopted by December 15th of each year. All property tax mill levies must be certified by the Board of County Commissioners on or before December 22nd of each year. Prior to the beginning of the next fiscal year, the Board of County Commissioners enacts an appropriating resolution to approve the total budget and departmental expenditures. Expenditures for each fund may not legally exceed budgeted expenditures at the individual fund level. By County policy, expenditures in the General Fund cannot exceed the appropriated departmental level. Neither the Board of County Commissioners nor any County officers can expend money for any of the purposes set out in the appropriation resolution in excess of the amount appropriated. The Budget Manager may transfer budget amounts between line items as long as the total budget for the fund or General Fund department is not exceeded. Any revisions to the total appropriation of any fund must be approved by a supplemental appropriation resolution by the Board of County Commissioners. A few supplemental appropriation resolutions were enacted and filed with the Division of Local Government, State of Colorado. Supplemental appropriations for the current year have been approved by the Board of County Commissioners in the following year. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-33

Tagged Passions:funding, finance, budget, taxes, Taxes, property, hearing, manager, policy, financial report, and property tax

NOTE 4: CASH, DEPOSITS, INVESTMENTS, AND RESTRICTED ASSETS A summary of Cash and Investments for the Primary Government and Fiduciary Funds (excluding the Retirement Trust Fund see Note 14) and discretely presented component units are as follows:

Primary Discrete Agency Total Reporting Government Component Units Funds Entity Cash and Investments 161,534,543 43,566,410 34,354,859 239,455,812 Restricted Cash and Investments 51,184,089 29,555,022 498,162 81,237,273 Total Cash and Investments 212,718,632 73,121,432 34,853,021 320,693,085 Total Cash Deposits (including CD's) 71,054,553 Total Investments 249,638,531 Total Cash Deposits and Investments 320,693,085
Tagged Passions:funding, retirement, seniors, and investment

Restricted Cash and Investments are recorded for the following purposes:

No additional detail provided

Tagged Passions:investment

Primary Discrete Agency Total Government Component Units Funds Reporting Entity

No additional detail provided

Tagged Passions:funding

Debt Reserves - 7,674,873 - 7,674,873 Debt Proceeds 1,200,000 - - 1,200,000 Capital Projects - 5,484,679 - 5,484,679 Legal/Contractual Obligations 49,984,089 16,395,470 - 66,379,559 Public Trustee Statutory Reserve - - 498,162 498,162

Total Restricted Cash and Investments 51,184,089 29,555,022 498,162 81,237,273

Tagged Passions:legal, capital spending, Capital Spending, and investment

Deposits Colorado State Statutes, specifically the Public Deposit Protection Act (PDPA) of 1989, require all public monies to be deposited in financial institutions that have been designated as eligible public depositories. Eligible public depositories must pledge eligible collateral for any amounts in excess of the required Federal Deposit Insurance Corporation (FDIC) amount, as promulgated by the Colorado Division of Banking, having a market value in excess of 102 of the aggregate uninsured public deposits. At December 31, 2018, the County s carrying amount of cash deposits was 43,611,588. Of the County s bank balances totaling 45,526,380, 2,099,442 was covered by FDIC and 43,426,943 was collateralized under PDPA. The component units carrying amount of deposits with banks was 27,442,965 and the bank balance was 33,285,638.

Investments Significant portions of cash in the discretely presented component units and the agency funds are pooled with primary government cash and then invested in the most advantageous manner to the reporting entity as a whole. It is not possible to determine how much discretely presented component unit cash was invested in a certain way. Therefore, this investment section is presented for the entire reporting entity, including the Agency Funds. Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-34 Authorized Investments The County has adopted a formal investment policy that limits the County s investments to investments within the confines of the Colorado Revised Statutes, sections: 30-10-708, 11-10.5-101, 24-75-601, 24-75-603 24-75-702. Investments authorized under these statutes include:

Tagged Passions:funding, finance, market, insurance, investment, policy, and financial report

Obligations of the United States and certain U.S. government agency securities and World Bank Certain international agency securities General obligation and revenue bonds of local government entities Bankers acceptance of certain banks Written repurchase agreements collateralized by certain authorized securities Certain money market funds Guaranteed investment contracts Local government investment pools

Tagged Passions:funding, market, bond, contract, and investment

As of December 31, 2018, the County had the following investments:

Investment Type Less than 1 Year 1-5 Years Total Primary Government and Agency Funds: U.S. Agency Securities: Federal Farm Credit Bank 10,396,120 29,872,050 40,268,170 Federal Home Loan Bank 4,978,350 24,880,200 29,858,550 Federal Home Loan Mortgage Corporation 4,948,350 25,886,902 30,835,252 Federal National Mortgage Association 14,882,800 15,058,202 29,941,002
Tagged Passions:funding, agriculture, and investment

Local Government Investment Pools 33,065,862 - 33,065,862 Corporate Bonds 29,314,518 - 29,314,518 Money Market Funds 674,855 - 674,855 U.S. Treasury Obligations 4,967,000 10,867,920 15,834,920 U.S. Govt Money Market Funds 315 - 315

Total Primary Government and Agency Fund 103,228,170 106,565,274 209,793,444 Component Units:
Tagged Passions:funding, market, bond, and investment

Local Government Investment Pools 39,844,746 - 39,844,746 U.S. Agency Securities: - - - Treasury Money Market 341 - 341

Tagged Passions:market and investment

Total Component Units 39,845,087 - 39,845,087 Total Investments 143,073,257 106,565,274 249,638,531

Investment Maturities

Tagged Passions:investment

As of December 31, 2018, the County had invested in local government investment pools which include the Colorado Local Government Liquid Asset Trust (COLOTRUST) and the Colorado Surplus Asset Fund Trust (CSAFE). The local government investment pools are investment vehicles which were established for local government entities in Colorado to pool surplus funds. Both pools are similar to money market funds, with each share valued at 1.00.

Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-35 COLOTRUST offers shares in two portfolios, COLOTRUST PRIME and COLOTRUST PLUS+. Both portfolios may invest in U.S. Treasury securities, Federal Instrumentality Securities, Agency Securities, Collateralized Bank Deposits, Repurchase Agreements, and Tri-Party Repurchase Agreements. COLOTRUST PLUS+ may also invest in Commercial Paper that, at the time of purchase, is rated in its highest rating category by one or more nationally recognized statistical rating organizations that regularly rate such obligations, and highly rated corporate bonds. A designated custodial bank provides safekeeping and depository services in connection with the direct investment and withdrawal mechanisms of the pooled funds. The custodian s internal records identify the investments owned by each pool investor. The investment pools are routinely monitored by the Colorado Division of Securities with regard to operations and investments. As of December 31, 2018, the County, including component units, had 39,693,898 invested in COLOTRUST.
Tagged Passions:funding, recognition, finance, market, bond, surplus, services, purchasing, investment, commercial, and financial report

As of December 31, 2018, the County, including component units, had 33,216,710 invested in the Colorado Surplus Asset Fund Trust (CSAFE). CSAFE is an investment vehicle established for local government entities in Colorado to pool surplus funds. The Colorado Division of Securities administers and enforces the requirements creating and operating CSAFE. Investments in the external investment pool are shown at amortized cost for financial reporting purposes. CSAFE is rated AAAm by Standard and Poor's. Investments of CSAFE are limited to those allowed by State statutes. A designated custodial bank provides safekeeping and depository services in connection with the direct investment and withdrawal functions. The custodian's internal records identify the investments owned by participating governments.

Credit Risk
Tagged Passions:funding, finance, risk, surplus, services, investment, poverty, and financial report

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. Credit risk is measured by the assignment of a rating by a nationally recognized statistical rating organization including Standard Poor s (S P), Moody s Investor Service (Moody s) and Fitch Ratings (Fitch). Currently, the County has no formal credit risk policy. The following table displays the ratings for the County s investments at December 31, 2018:

S P S P S P S P S P Investment Type AAAm AAA AA+ AA- A+ N/A Total Primary Govt and Agency Funds: U.S. Agency Securities: Federal Farm Credit Bank - - 40,268,170 - - - 40,268,170 Federal Home Loan Bank - 29,858,550 - - - 29,858,550 Federal Home Loan Mortgage Corporation - 30,835,252 - - - 30,835,252 Federal National Mortgage Association - 29,941,002 - - - 29,941,002

Tagged Passions:funding, recognition, agriculture, risk, investment, policy, and poverty

Local Government Investment Pools 33,065,862 - - - - 33,065,862 Corporate Bonds 4,950,250 14,954,550 4,990,750 4,418,968 - 29,314,518 Money Market Funds 674,855 - - - - - 674,855 U.S. Treasury Obligations - - - - 15,834,920 15,834,920 U.S. Govt Money Market Funds 315 - - - - - 315

Total Primary Govt and Agency Funds 33,741,032 4,950,250 145,857,524 4,990,750 4,418,968 15,834,920 209,793,444 Component Units:
Tagged Passions:funding, market, bond, and investment

Local Government Investment Pools 39,844,746 - - - - - 39,844,746 U.S. Agency Securities: Treasury Money Market - - 341 - - - 341

Tagged Passions:market and investment

Total Component Units 39,844,746 - 341 - - - 39,845,087

Total Investments 73,585,778 4,950,250 145,857,865 4,990,750 4,418,968 15,834,920 249,638,531 Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-36 Custodial Credit Risk

Tagged Passions:finance, risk, investment, and financial report

For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County's safekeeping bank must meet the following requirements under the County s investment policy: the purchase and sale of securities and repurchase agreements shall be settled on a delivery versus payment basis, ownership of all securities shall be perfected in the name of the County Treasurer, and sufficient evidence to title shall be consistent with modern investment, banking and commercial practices. At December 31, 2018, all of the County s investments are held in the name of the County.

Interest Rate Risk

Tagged Passions:sale, risk, events, purchasing, investment, Treasurer, commercial, TREASURER, and policy

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment instrument, the greater the sensitivity of its fair value to changes in market interest rates. The County s investment policy maintains that the portfolio is to remain sufficiently liquid to meet all cash requirements that may be reasonably anticipated. One of the ways the County manages its exposure to interest rate risk is by laddering maturities evenly to provide continuous cash flow and liquidity needed for operations. In accordance with its investment policy, the County s investments are limited to maturities not exceeding five years from the date of trade settlement.

Concentration Risk Concentration risk is the risk of loss attributed to the magnitude of the County s investments in a single issuer. The County s investment policy states that the County shall diversify its investments to avoid incurring unreasonable risks inherent in over-investment in specific instruments, individual financial institutions or maturities. The County seeks diversification to reduce overall portfolio risk while attaining market rates of return to enable the County to meet its anticipated cash requirements. Investments in any one issuer (other than mutual funds and external investment pools) that represent 5 or more of the County s total investments are as follows:

Tagged Passions:funding, finance, market, risk, investment, policy, trade, rates, and settlement

Percent of Investment

Investment Type Fair Value Portfolio Federal Home Loan Mortgage Corporation 30,835,252 15 Federal Farm Credit Bank 40,268,170 19 Federal National Mortgage Association 29,941,002 14 Federal Home Loan Bank 29,858,550 14 Apple Inc. 9,979,950 5 Treasury Note 15,834,920 8
Tagged Passions:agriculture and investment

As of December 31, 2018, the component units had no investment in one issuer (other than mutual funds and external investment pools) that represents 5 or more of total investments. Foreign Currency Risk

Tagged Passions:funding, risk, and investment

Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an Investment. All of the County s investments, including its holdings in foreign corporate bonds, are denominated in U.S. currency and, therefore, not subject to foreign currency risk.

Arapahoe County, Colorado Notes to the Financial Statements (Continued) C-37 Fair Value The County categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities relationship to benchmark quoted process; Level 3 inputs are significant unobservable inputs. The County has the following fair value measurements as of December 31, 2018. Investment 12/31/2018 Level 1 Level 2 U.S. Agency Securities 130,902,974 - 130,902,974 U.S. Treasury Obligations 15,834,920 15,834,920 - Corporate Bonds 29,314,518 - 29,314,518 176,052,412 15,834,920 160,217,492

Tagged Passions:finance, market, bond, risk, investment, financial report, and rates

Amortized Cost: Local Government Investment Pools 33,041,145 U.S. Govt Money Market Funds 315 Money Market Funds 674,855

33,716,315

Tagged Passions:funding, market, and investment

Net Asset Value (NAV) Local Government Investment Pools 24,717

209,793,444

Tagged Passions:investment

NOTE 5: INTERFUND RECEIVABLE AND PAYABLE BALANCES AND TRANSFERS

Interfund receivable and payable balances arise due to short-term cash flow needs in certain non-major governmental funds. At December 31, 2018, the balances are as follows:

No additional detail provided

Tagged Passions:funding

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